The market after a weak rally had an upthrust at 105.36. Note the low volume on the next bar making it an attempted rally that failed which is confirmed by the following bar with ease of movement down. Once the decline begins, the closes on all rallies until the low are contained in the range of the large down bar that precedes the rally. This shows the dominance of supply and the weakness of demand. There is no significant demand in the rally that ends with a small range and low volume at 104.93. The subsequent decline is able to make a lower low and as such we end the day in a potential down trend.
This chart clearly depicts the ambiguity of Friday, a lower high, low, and close(also at the low end) with a narrow range and the second lowest volume of the month. Either there is no demand or supply is exhausted with shortening of the downward thrust. The intraday analysis above suggests an answer but it is not definite.
If the trend has changed then one must pick a vehicle. So for example, DRV did not make a new low with most of the other ETF's shown and with the indexes. Mr. Wyckoff would have been attracted to that sign of strength and in fact DRV has had the largest percentage move so far. Note all of these ETF's finished the day looking much stronger than the SPY looked weak.I have also shown charts of the dollar and the bonds as we have discussed before their relation to the equities. A breakout looks imminent in the bonds and the charts show heavy buying in the dollar for a turn. Both needless to say are bearish stocks over the medium term.
