Looking at the SPY bar chart, we opened lower and rallied all day in a small range, with low volume, and lower close near the high, . This looks like a rally that failed, lacks demand, but we can only gain more certainty by examining the intra-day chart.We open lower on low volume and then rally sharply with increased spread and relatively high volume, 171 wave volume. This looks like short covering.(hat tip Gary Fullett) The same kind of jerky up move ends the waves at 261 and 220. Short covering again. Notice that these numbers 171, 261 and 22o are high and in fact higher than any of the down waves of the past few days. We however make minimal upward progress and cannot even close higher on the day. There is too much resistance, or selling into, the short covering up move. The effort up is not proportionate to the result. Put differently there is no ease of movement up. We have had no ending action, the trend remains lower.
