This is where the setups are
Tuesday was choppy and weak, with the major indexes closing at their lows of
the session. Technically, however, this comes as no surprise. We’ve seen the
market bounce on decreasing volume for a few days, and the weakness returned as
a result of trapped longs finally getting out and bears again getting short.
The S&P 500, like the NAZ, simply ran out of buyers to fuel the upside move for
now at least. This is typical dead-cat bounce action. Tuesday’s volume, while
not high, did increase over Monday’s advance, which is negative. A break of last
week’s lows at 1168 would likely send this index back to the spring lows in a
hurry, so keep an eye on that level….
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