This week was a sea saw posting a lower high on the indexes indicating the possibility of further downward movement. By my view, the markets are possibly in the process of making a c corrective decline wave which will possibly end around 1040 on the S&P. While initially today the price action pierced through the lower low of 8/16 in bounced back strongly in afternoon trending ending at 1071.69 . This leaves us with an unclear picture of what’s to come. Will the markets find strong buyers next week and push the prices higher again? Or will they get pushed below this 8/16 support level at complete the declining wave? To make things even harder to see, SPY broke the downtrend by hitting the 107.71 level on the lower high that was posted in pre-hours on the 30 minute chart today. Though it didn’t break out, it leaves us with big questions going forward. Should it go through on Monday, it will officially end the short term downtrend and give the possibility of an upward or sideways movement. Enough people must believe this when taking into account the fact that traders were confident enough to buy SPY in the afternoon going into the weekend. I personally wonder what people see in the economy or the news that would give them such an impression. Perhaps it is fueled by the fear of missing out a good entry for a move higher that is helping people buy and hold. It is important to note that looking at that S&P the downtrend on the 30 minute charts are still intact for the short term.
Market reflections for this week