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Monday, April 20, 2009


Big Down Day

The big down move day came today as expected . This chart shows that today was the biggest down day since the rally started, and the second 9-to-1 down volume day:

It was actually a huge 27-to-1 down volume day, with the SPX closing at its low and breaking last week's low, meaning the S&P 500 will have its first lower low since the rally started, breaking the trend of higher lows. In this one day, the market gave back the gains from the last 2 weeks and more.

Today was clearly a trend down day, with hardly any positive ticks seen on this 1-minute NYSE Tick chart:

There was hardly a bounce during the day, with down volume vs. up volume steadily increasing, along with TRIN, indicating strong volume going to the losers. TRIN closed pretty high, near 3, so there should be a rally attempt at some point tomorrow, or a gap higher.

The updated hourly chart of the S&P 500 shows a break of the huge rising wedge along with a continuation of the PPO bearish divergences with the amazing 5th lower high on PPO (accompanying 5 higher SPX highs) and its bearish cross sell signal:

The break of the huge wedge should mean this pullback will go significantly lower, though there may be a short-term bounce back toward the breakdown area first.

If this pullback follows the pattern of the previous 5, the S&P 500 should make a lower low tomorrow, though it might bounce back short term from there.

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