Bear Engulfs Rally

The market attempted to make a 4 year high today and fell short.  Apparently the bears didn't like the fact that the market was going to make the 4 year high so the markets closed after a very good start.  Never-the-less if you were not expecting the market to pullback shame on you, you should know better.

After all it has had a good run this summer doesn't it deserve a rest after mounting to 48 month high, but the bears are out the S&P was down .35% today and I would expect there should be more to come.  The bearish engulfing pattern that usually preys on uptrends.

I'm to concerned that this has reached a top.  Number one the volume is pretty low and the volume would have to be 100% higher than it was today to cause any red flags.  Second economic data has been for the most part encouraging, and finally their is an expectation that the ECB is going to have some defenitive plan for the Euro crisis in the coming month.  If the SPY breaks the trendline from June then is the time to worry that we will have substantial leg down.

I would expect this week news should balance out, meaning that we might be disappointed by jobs and not by the FOMC minutes or vise versa.  Either way I think that profit taking and a pullback will finish out the week,




To get more in depth trade ideas and analysis get our FREE 3 WEEK  trial to SMART TRADE NEWSLETTER . Learn more.   

Disclaimer: This article is intended to be informative and does not constitute a buy, hold, or sell recommendation., and should not be construed as personalized advice as it does not take into account your specific situation or objective