Seems no one provided a treat for the market today so it had no choice but to give us a trick. Dow down 276 points! But all is not lost. And perhaps the trick is not as bad as it seems. Seems we got just a wee bit overextended and today was a big pullback day, when consolidation day was the expected flavor of the day.
The Daily chart had to fill the gap up and has almost done just that. Yes, it happened in one day and we would have preferred 3-5 days with a nice consolidation pattern. But just the same the gap fill had to be done. Now the big question is, can price hold here. It's above the second breakout (the first breakout being the top of the channel denoted by the first two white lines). So we seem to have some good support. And the next few days brings in new money to the Mutual Funds that has to be put to work. Hoping for an upside resolution, but be ready for it to go either way tomorrow. The VIX had dropped to the 25 level but today went right back up to the 30 level. Volatility is back.
Posted below are two charts. A Daily Chart. And a Weekly Chart. Long term bias is still with the Bulls, in spite of the big drop today.
CURRENT MARKET TRENDS
Long Term (Weekly Chart) – Up
Medium Term (3 day chart) – Sideways with an upside bias
Short Term (Daily Chart) – Sideways
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