(I briefly answered the question in the comment section yesterday.)Today is an interesting day and it is an example of what we have been discussing for many months. The index made a new low today. How do we know if that new low is a signal to expect further weakness or is a spring and a turn around in price? Our hypothesis is that it has to do with whether strength or weakness precedes the new low. Given the weak rally and swift decline that took place in the nine days before this new low, I am expecting further weakness after this brief rally ends, quite possibly beginning tomorrow. This is a good test of our hypothesis because today's increase in volume, narrow range and close at the top all point to strong support. If that support is going to contradict the long period of weakness the market has experienced, it must do so emphatically with a strong move up.
