Market Conditions

I normally don't like to blog during market hours because (1) the last hour of the trading day is the most important hour of the trading day and (2) the closing price is always in question until the close.

But I have some free time during lunch, so here goes....

The market's behavior is consistent with a developing top. The market dipped down to the 13-day moving average. Buyers came in to buy the dip. I was then looking for the market to rocket to new highs and to take out resistance @1291. Instead, the market stalled out @ 1291. Q: What does this retreat tell me? It tells me that resistance is beginning to matter more and more. In a raging Bull Market, resistance is cut through like butter. We are far from that condition now.

I think the market will power higher than 1291, however, it may or may not happen today. Even though I am bearish, I actually want the market to bounce higher above 1291 and 1296. Why? Because a higher high with a lower high in the Relative Strength Index (RSI) will set up a nice negative divergence that can be sold. As a rule of thumb, a negative divergence is a desirable set up and trading opportunity. It doesn't happen often but it is worth waiting for.

The time is now 12:37 in San Diego. The market will close in 23 minutes. The opening price was 1288.17. So, I want to see how the close correlates to the open. Will the close be higher, lower or the same level as the open? We have had a ten-point range day, so today will not be a narrow range seven (7) day.

Some days are days of opportunity. Today is just a day for watching the market and taking cues from the price action.

Later.

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