Here are my five top reasons why the market should be down next week:
1. The heaviest volume this week was on a down day (Tuesday). This pattern suggests distribution by institutional investors.
2. Since Tuesday, the volume has been been dropping each day while the market has been drifting higher. You need higher volume to support higher prices. With lower volume, you will eventually get lower prices.
3. Today was an inside day. The high and low of the day were contained within the price extremes of yesterday's price action. Inside days are rare in the market place. They are a good sign that a new trend will begin within a day or two.
4. The market has not been able to close with conviction above 1181. Today's day was an inside day and does not count as a close with conviction. This suggests that the Bulls are less taken with the market than in September.
5. Finally, the Histogram continues to be negative.
Taken together, these conditions all point to lower prices next week.
Have a good weekend!
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