Intraday:
We started the day off with about a 2% move upward before turning back down and ultimately closing lower for the day. This is a classic single day pattern called a “gap and trap” which in itself has no real indication of future direction but does indicate weakness in the market. In short, we have gotten nowhere from Friday.
Daily:
On the daily chart we failed to get confirmation of our potential reversal pattern from Friday. The Di lines on the ADX still looking like they want to converge. The MACD and stochastic remain bearish. I should point out that even though we are still in a bar channel we are beginning to set up a bullish falling wedge. If we continue down we could see, at least, another 100 point drop on the S&P 500. If we get confirmation of the reversal pattern from Friday, we will be looking for prices to advance to the 20 day moving average, maybe back to the neck line level of 1260.
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