Lot's of reasons to be a bull today:
- China GDP came in stronger than expected (Q4 +8.9%), Shanghai up more than 4%.
- Spain short term auction is positive
- European yields were going lower
Hence the gap up this morning! But what one doesn't want to do here, is buy a gap up after a rally like the one we experienced the last couple of weeks! I'm not calling for a top, but going long here looks like suicide.
The question about today's gap, is it a continuation gap or an exhaustion gap?
With 90 minutes to go in the session, price broke lower, through 129.70 in SPY, a level that was touched several times during the day (=support). Some volume came in, but no heavy selling. The bounce came just above 129 and Friday's high. But this time no rally towards the close, unlike the previous three days => bearish! This 130-level in SPY (1300-ish for SPX) maybe an important resistance level for some time.
5m-chart SPY:
Daily charts DIA, SPY, QQQ and IWM. Tech leading, small caps lagging:
Metals and oil were outperforming indices today. The euro was trading higher as well, up 0.5%.
Articles for this evening:
Nobody's worried? Complacency sets in
What a Top Looks Like
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