A count of 7 across the 900 gives a range of 950-970 which the index accomplished. The index is on a hinge with a count of 4 at the 940 line which brings us back into the previous trading range where the count can begin adding up quickly for a substantial decline.


Today the index with a small range and narrow volume tested the upthrust to 951.69. This is ominous and helps to confirm what I wrote in my last post. One of the great bear market rallies in history has ended. Clearly demand is exhausted, we are only awaiting supply.

The hourly chart of the SPY records its highest volume in 5 weeks the last bar on Monday. This volume was climactic and today we upthrusted that high. We must place today's upthrust at a lower level in the context of the reversal bar which peaked at 95.67. Having made a clearly lower high the direction of least resistance is down. We are only awaiting supply.

It took 3 1/2 hours to rally the 10 points from low to high today on the 5 minute intraday. This rally was weak and ended with a nice outside key reversal bar. There was no real demand at the close either. Note how light the volume was, far less than half the usual. We are only awaiting supply.