- The S&P 500 has pulled back just a bit during the trading session here on Friday as 6,500 just seemed to be far too resistant and far too difficult to get above.
- We sold off and at this point in time it looks like we are just starting to hang around and wonder whether or not the 6450 level holds or if we continue to go lower from here.
- You could make an argument, although I'm not a huge fan of this yet, that we are in fact forming some type of rising wedge.
The problem with the rising wedge pattern is, it's not confirmed until it's too late. But if we were to break down from here, then you could be looking at 63.45 and then eventually 6,200. Ultimately, this is a market that I think given enough time probably needs pullback. We don't have a lot of volume. Nobody really knows what to make of anything because Wall Street is more or less away on holiday.
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Volume is Poor
I'll tell you that we are seeing a divergence with volume, but again, that holiday season kind of takes that out of the equation as far as a signal. It just tells you that nobody's involved. Ultimately, I think you have to look at this as a market that will remain lackluster. But if we could finally clear the 6,500 level, we could go much further to the upside. I suspect we're getting a little heavy here.
This is a market that went straight up in the air for a while and now it’s just kind of struggling. I wouldn't be short of this market, but what I would be doing is looking for short-term pullbacks over the course of a couple days that bounce nicely that we can take advantage of, or a breakout to the upside.
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