Don’t be fooled by the tape. As I posted yesterday the tape is dreadful.
There’s been heavy and continued selling in your former market leaders and the market has been going up on fumes this week.
We are grinding up with fewer and fewer stocks participating.
Look at the SPY chart below which has an overlay of the number of S&P100 stocks above their 50 day MA in blue. Notice the negative divergence.
The longer-term trend continues to be up but the risk is for a short term pullback. Stay diligent and watch to see if this week’s lows are at risk of being taken out for a possible larger pullback.
Also pay attention to DIA. Watch to see how we deal with the possible inside bar reversal on the daily and the outside inside pattern on the 4H tomorrow.