After an impressive show of strength, the market has hit a wall.
From the most recent bottom, on February 8th, the S&P 500 has rallied a whopping 5%. Unfortunately, volume has continued to fall as prices advanced signaling a lack of support from professionals.
Just as I was sure that the floor had dropped out, strength emerged as the S&P 500 closed on highs for the session.
Once again, I think this is a great example of using bad news to create a buying opportunity for the professionals. Here, we are seeing prices driven down by bearish news only to finish on the highs on increased volume. How could everyone be selling if the market closes on highs?
With February upon us, we have to wonder how much farther the market will fall. The S&P 500 is right at the trend line support levels and the MACD is reaching extreme, negative levels.
