Wednesday March 30, 2016
Key Developments :
- First signs in a while strength being sold.
The uptrend remains in place along with the double bottom target of 2084, after Yellen’s kick save yesterday as there was a clear bearish pattern ready for the taking, but the dovish commentary saved the day (review yesterday’s report if needed). The big development in my mind is the first sign of selling strength showed up. We have not seen this in some time. and is something to certainly make note of. This selling of strength can be seen by the failed inverse H&S on the chart at the top. In a strong bullish market, these capture their upside targets. This one did not and was sold aggressively into the close. Maybe it is quarter end profit taking, maybe not. We’ll have to see how things develop over the coming days, but selling of a pattern like this is something to take note of as it is a sign of selling pressure.
Again to be bearish we need so see far more destruction in the price action and we still have the double bottom measured move target of 2084 to watch for.
The Bottom Line:
At this point the bears still have some work to do, but it is hard to be pressing longs. A neutral stance with trades in single stocks is probably the best way to play it.
Chart of the Day:
Watch UPS to see if it can take out these support levels triggering a H&S top pattern targeting a move to the 50% fib retrace or lower.