This market remains one that is very difficult to call. There are lots of things going on that influence the direction of the markets; like The Fed, extremely low interest rates, poor corporate earnings, wild Presidential campaigns, weak international economies, etc. It seems like when any one of these "pops" just a little, the market goes crazy. That is why the market is relatively flat, but with high volatility.
From a "technical" standpoint, we have had a really interesting standoff, with the Bulls winning most and the Bears winning a few. However, the Bears have been in charge so far this week, but the Bulls may have pulled off a "turnaround" today. Still too close to call, but let's lay out what we see.
From the graph below, we can analyze the pros and cons for each side:
Bears Bulls _ ________ __
Broke triangle pattern down 3 days ago Today the SPY closed above its support at 212.0
Continued down for the next two days Today's "candle" is in a positive "Hammer" position
The SPY broke it's 100-Day EMA today Today may have been a "One Day Key Reversal"
From the graph below:
Bears Bulls _ ________ _______
Broke below triangle pattern Market re-bound performed like a "One Day Key Reversal"
Broke just below the Long-Term trend line Rebounded to closed almost on the Long-Term trend line
Broke just below its 200-Day EMA
The short-term future of the market is very difficult to call under these conditions. The current MIPS signals are "LONG", so we should hold our long positions for now.
Paul Distefano, PhD
MIPS Timing Systems