I've just got back in from out of town. I left when the market appeared to be rallying and was presently surprized to hear it fell at the close. There was fairly good volume and this was a good showing by the bears. Today was the first time since March 10 the bulls could not make two consecutive up days.
The attached chart shows all of the technicals indicators have gone bearish with the exception of the CPC and CPCE. Unfortunately, these are the two main leading indicators with the rest being lagging indicators. But the CPC and the CPCE will go in the bullish or bearish based on market action over the next day or two. Consider them in a roughly neutral position. The VIX went bearish.
The 30 and 15 minute stochastics suggest the market should decline tomorrow. But we will have a lot of earnings announcements along with initial unemployment claims and existing home sales before market open.
The pre-open announcements will determine market direction tomorrow. I anticipate existing home sales will rise due to seasonal trend, which should put the market in a good mood. It will take poor earnings and intial unemployment claims for the market to decline.
Unless there is fantastic news, I do not expect the S&P to reach the April 17 high of 875±. The bulls must break 875 tomorrow to prove they are in control. If they do, it might be game over for the bears as the shorts start covering and drive the market higher. The market is in a decline, but we can expect some volatility along the way. I do expect the S&P to fall to at least 780 in the coming week.
The 30 and 15 minute stochastics suggest the market should decline tomorrow, but once again, announcements will determine its direction.
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