Good morning. S&P500 futures are higher this morning, following a strong showing yesterday for the indices. Is this just a relief rally with more downside on the horizon? Or is the bottom of this most recent pullback already 'in'.?
A day after hitting record highs a few weeks ago, I noted a negative momentum shift had been triggered. One that usually presaged a downside scenario for the market..
and sell off we did. Through the sell off, in my updates, I was waiting for a positive momentum trigger before changing my bias.
Yesterday we got just that from the $SPY.
I was looking for a test of $277.50 support.. which is something we did not get. Is there a chance this is a false signal? Perhaps. The last buy signal came right at the lows at the end of December with the $SPY in the $230's, and rally was a tremendously impressive $64. What can we expect if this is indeed another momentum trigger? First lets look at small caps, tech, and the Dow.
$IWM came down to channel support as I thought it would.
However $IWM $DIA and $QQQ have yet to trigger a positive momentum signal.
Perhaps we will get that today. Which will, in my opinion, confirm that the bottom of this most recent pull back in indeed in.
And if so, despite all the trade talk drama, this market just may continue to defy the odds.
Oh yeah and we can bring Brexit back into the fold as that drama comes back into focus over the short term.
There still remains so many excuses to sell. And we know how that has worked out since 2009.
Finally, how about that VIX? It looks like another one of those parabolic fades is under way.
Price action will continue to tell the story, not the fear mongering headlines.
See you in the chat room.