Crazy market the last two days but as long as dip buyers show up in the nick of time then that’s all that matters. It doesn’t appear that we’re going to get a follow-through rally tomorrow unless there is some kind of agreement reached in Washington because otherwise I really don’t know what else could initiate such a rally.
Zweig Breadth Thrust rose to 60.20 today so it only needs to climb 1.31pts tomorrow to give us a Breadth Thrust. Could happen and would be an interesting side note to this nascent rally.
The RSI on the 60min charts of the Q’s and IWM both closed above 70 today so these two are back in overbought territory and need a breather before pushing higher. Don’t know if that’s going to happen since these two have been in overbought territory most of the week without much reaction but if they did stall or roll over a bit tomorrow it wouldn’t surprise me.
On Balance Volume isn’t confirming the latest move in $SPX or $INDU. In other words, OBV should have closed significantly higher today than it did back on the 23rd when both of these indexes closed lower, but that is not the case. We don’t have negative divergence yet but it is close and needs to be watched for the next few days to make sure that OBV gets back in sync with these two key indexes.
Daily chart of $SPX showing that I’ve put a rising trend line in place. I would like to see the DI lines have another bullish cross soon because if not then it means that the ADX is not confirming the current new rally leg. Today’s candle is a Spinning Top which is another one of those indecision candles and could be a warning of a pending reversal. As with all of these, confirmation is needed and in this case that would be a close below today’s low at 1409.04 . Given that the 5,3,3 Sto is overbought, then we might see some give back tomorrow but a little give back in and of itself would not confirm a reversal, just a pause. Just something else to watch tomorrow.
GL and be careful.