Click on above image to enlarge & see 8/1/10 for how to interpret the top 3 charts
Today the markets closed down modestly which is completely normal for such a huge day up yesterday. Tomorrow will be key to determine if this bull breakout goes higher or the bears get a hold of the market again.
The larger chart I posted above, underneath the nightly three is a 5 week chart of the S&P500 index showing how they are trying to hold the really aggressive uphill green channel. The bears are trying to top out the rally already or at least get it trading somewhat sideways which is the red channel. The individual price bars are one hour bars and as we traded into early afternoon today we squeezed right into the point of where the two charts intersect and in the last two hourly bars you see it failed and dropped down back into the red channel. This is definitely not good, but the last one hour price bar is a tiny hammer reversal candle which the bailout team has been using pretty heavily to signal that they don't like what happened today and that they intend to reverse the market back up tomorrow after dropping off in the last 2 hours today.
The outlook on almost all stocks tonight depends on how this intersection of 2 channels is resolved tomorrow morning. Tomorrow's trading is also very important because the low of the last hour of trading set down onto the 5 EMA line and bounced up a little. If we slip back down thru that and completely lose the green channel at the same time it's going to be a bad day unless the bailout team comes charging onto the field to help.
Alan
