Another Wild Day in the Market Today

spydjt Everything that happened today in the market is still convincing me that we are at a key turning point this week and that we should be more down by the end of this week.  However the bulls are not giving up easily and are creating buy spikes that push the market higher into intraday recoveries.  They tried that today but could not really get a solid recovery by the end of the day today.

The Dow Transports had a key day today because they broke through up trendline support as you can see in the chart to the left.  The SPY is sitting right on support as of the close today and it seems as though tomorrow’s and Friday’s economic data is going to either allow the SPY to bounce high off of this support or break down and through similar to how the Dow Transports did today.

The down volume on the SPY seems to be the clear hint about what this market wants to do.  The SPY did 254 million shares today on the downside compared against much lighter advancing volume in recent days.  The down volume is picking up recently and it is doing so near the top of this rising wedge. 

I continue to believe that we are at risk of a more involved downside correction.  But I am still unclear as to what the SPEED of the correction will be.  We are just going to have to see how it develops in October.

I continue to be intrigued by some forecasts of a market crash and 1929 style rapid price decline but I am still very skeptical of that type of tape action because of my believe that we are going to do a more ‘orderly’ 1975 style 15% decline.  However I could be wrong and I will have to get more price data to see if I have to change my scenario analysis (1975 versus 1929 style).

I have a feeling that they bulls still want to spike this market up at least on an intraday fashion during the next two days.  They probably want to blow as many shorts out as possible before this market makes a real trend change.

Posted in Index Trading, SP500
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