Here we are again. Does $SPY bounce and continue to consolidate around the 50 day average or does it slice through the 50 day and begin a real correction?
Two of my breadth indicators are signaling that we will bounce, and soon. Let’s take a look.
We are focused on the red and green indicators in the bottom panes. The green line is the decliners indicator which ranks the current number of decliners against previous numbers. Anything above 80 is usually good for an immediate bounce. It closed at 90+.
The red line is the number of stocks above their 5 day moving averages. I like for this number to get beneath 700 in order to indicate the possibility of a bounce sustaining itself for several days. It closed at 891.
I’m looking for a quick bounce. I still think it will not be sustained for long and $SPY will end up right back where it started.