The spx and the spy made a new high today and both then fell back into the trading range to close higher. The futures did not make a new high and in a brief moment for ego, since I primarily pay attention to the futures, my claim that the high was in is still valid and we are still awaiting supply. We can now leave ego and as fallible human beings approach these treacherous markets. The SPY today made a new high on moderate volume, a narrower range and a close at the low. Tomorrow quite likely will be a do or die day for the bulls. Any follow through lower tomorrow will put the point and figure of the SPX on the hinge at 940 with a count of 60 points from the 940 bar. 60 points brings us into the old trading range and potentially very high counts. Again we are awaiting supply.I want to turn to the upthrust today and how I believe Mr Wyckoff would handle such a thing. At 12:55 and 1:00 we had had very high volume on the move into new high ground. The close in the middle at 1:00 followed by two heavy volume down bars with closes at the lows puts us on our guard. Something is not right. There seems to be too much supply retarding the rapid advance I would expect. The average rallies up on less volume in what I believe to be shortening of the thrust and now I am downright suspicious, but I want evidence of a change in trend. In the three bars following 96.11 the market rapidly and easily gives back its gain. There is ease of movement going down, very important. The next bar has low volume and a close at the bottom--a failure to rally and evidence that demand might be exhausted, at least temporarily. At 1:55 more evidence for lack of demand. At 2:05 we made a lower low, edging below the low at 1:05. The reversal bar at 95.88 signals a lower high, setting up the beginning of a downward trend. The trend has changed and that would very much interest Mr. Wyckoff. Ignoring misprints, lower lows and lower highs are the rule for the remainder of the day. The market closed having begun a downward trend. It is now up to the bulls to turn the trend around and the bears to win must enlist supply.
