On Thursday, the S&P 500 broke a three-day winning streak with a loss of 0.8%. The index did manage to record a new intra-day recovery high before a final hour sell-off put it in the red. The result was an outside day (i.e., both a higher high and a lower low than Wednesday’s range). Breadth was negative by an almost 4:1 margin, and the up/down volume ratio was negative by more than 2:1. The day’s pressures were exacerbated by a 21% increase in total volume. The daily Coppock Curve still has a bearish bias for 22 of the 24 S&P industry groups.
30-Minute S&P Point and Figure
In yesterday’s post we felt that the “pop” from Friday’s low may well have been completed. While today’s action was a big step in that direction, the S&P remains above 1087-1084. Since that range has repelled all setbacks over the past several weeks, we will continue to give the November-December uptrend the (increasingly stingy) benefit of the doubt. However, it is important to note that all degrees of trend from intermediate on down have a bearish momentum bias. We believe that the weekly Coppock Curve is positioned to remain under pressure into next year. The daily oscillator is expected to remain weak for another two weeks.
Meanwhile, until the 1087-1084 range is broken, the door is still open for a more serious test of the 1121-1156 range that we have highlighted as a significant resistance area. Today’s high came within 0.3% of that range.
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