________________________
After yesterday’s broad market gap lower, we ended up printing a series of candles on quite a few daily charts that looked like mini- Japanese hammers. Even with those smallish post-gap candles, today the major indices appear to be close to printing “inside days,” with price residing within the confines of yesterday’s range. There is not too much to take away from this type of flattish action, other than the potential for bulls to stabilize things. Beyond that, trying to make too many daytrades during an inside day is usually a mistake, given the compressed intraday playing field.
Above all else, I am looking to see whether today’s intraday weakness occurs without taking out yesterday’s lows. As this week progresses, I expect volume to continue to dry up, with tomorrow being busiest traveling day of the year. Currently, the S&P 500 is at 1185, with yesterday’s lows at 1183. If the bulls are going to claim progress with an inside day, then they should see to it that the lows are in for the day.
Not looking good at all.