As anticipated in today's early post, equities reversed to close the morning gap and ended the session on a weak note. The market has now posted two consecutive false breakouts above SPX 875, a level that halted advances in late January, early February, and earlier this month. I firmly believe these head fakes were designed by sardonic market gods to take out short stops before moving prices lower. We will only know after we see whether downside follow-thru can be acheived tomorrow.
Here is another reason immediate follow-thru is important:
We should now see a minimum decline to the 65DMA on the SPX, putting prices in the low 800s. How we dance with that MA will tell us whether there will be another leg up or a direct decline to new bear market lows.