So the much prophesied rally began. As pointed out yesterday, the disappearance of supply toward the end of the day made a rally possible and today we had it. So lets begin with the obvious. There is no change in major trend on the point and figure. No major down trend lines have been decisively broken, even the hourly shown above. And now to the surprising-- Today was the second lowest volume, despite the massive short covering on the SPY, all month. Only the failure of supply yesterday was less. So far there is no more demand to own stocks than there was supply yesterday.This short covering rally is providing a massive opportunity to sell large quantities of stocks. There are at least three separate buying climaxes today. The first was at 9:20 price 707.75 with higher volume, smaller range and a low end close. The second at 715.5 also had a narrower range with very high volume especially for the time of day @ 12noon. In the middle of the day
like this it had to be very professional selling by someone who saw the opportunity to sell a lot quickly into a market that would take it easily. Selling such as this probably means a top is not far off. The last slew of selling occurs on the third and fourth bars before the close of the day. These are the highest yet and a mere 6 points higher than the middle climaxing bar. Unless I am reading this totally backwards, this rally will prove to be hollow sooner rather than later.
