Today the index decisively made a lower low, closing at the lows on average volume. Once again the downward move had little resistance from buyers. The count on the hourly chart which has been uncannily accurate brings us to a minimum target of about 890 on the spx.I want to go over the intraday in detail. We have discussed the lack of demand in the last two posts and I want to show what it looks like in the small particulars.
Until 10:10 the market is in a trading range with moderate volume. At 10:15 it pierces the bottom of that trading range and with the lower low sets up a possible downward trend. Unfortunately there is no subsequent lower high, it is an equal high. The volume however drops to nothing on this rally telling us there is no demand. The equal high will have to do. Most things are not perfect. At 11:00 price and volume move up. At 11:05 they retreat making the relevant higher low. A higher high is made at 93.29. Declining beneath the previous low at 11:20 confirms the possible downward trend combined with 10:15 lower low. Prices move down easily yielding further evidence of a downward move beginning. After traders see the poor rally attempt(no demand) at 11:35, they sell prices down easily, still no demand. Minimal support appears at 2:05 and at 2:30. No real demand appears in the next 75 minutes of rally. Selling in the last 15 minutes undoes the previous 75 minutes of rally telling us the direction of least resistance is down.
