Stock Market Technical Analysis Blog
click on image to enlarge
In the market today the SPY experienced the 3AM magic of Team Yellen as it did yesterday. Looking at the top chart above (24 hour chart), on the left side I marked in yesterday's 3PM close and in the middle of the chart I marked this morning's "more favorable" 3AM open of the SPY. (The vertical line at 3AM are not trades but rather the computer fills in the distance between its self generated opening quote and the actual first trade that happened considerably higher up) Throughout the morning hours and the premarket session and then regular session, the elevated opening of the SPY nearly a dollar higher (or 10 S&P points) was greeted continuously with big sell orders throughout the day. They are finding it difficult to find buyers or even shorts that will cover with their not so secret 3AM "price adjustments" on the SPY.
Looking at chart 1 above, the 3AM gap was up in the red channel but when the regular session opened it was well back down in the blue. Chart 2, right as the regular session opened the VIX dropped out of its blue channel but got back up to the bottom line of it at the close. See last nights blog for charts 3 & 4 commentary.
We are still flat with no positions, long or short. These repeated failures to produce a real breakout above 2000 are very negative for the short term market outlook. The irony is in that the bleaker their efforts look, the more large short positions will come into the market which actually gives them more fire power in a short squeeze if they can just get one started.
Trade well my friends