The end of the week has brought back Halloween: Scary things all around! Although it is not really Halloween and there are no ghosts or goblins around, there sure is a scary sight in the markets today. All of the major indices are down – sharply. As I write this, the S&P 500 is down 40 points, the Dow Jones is down 300 points, and the NASDAQ is down over 160.00 points! Scary – indeed.
The S&P 500 chart below shows the reversal.
Despite Wednesday’s rally being fierce, it was also with low volume and low breadth. When this happens, it is suspect to reversals. What’s more, it did not close above the red ellipse on the left.
Wednesday’s explosion, the intra-day rally (no overnight action), was completely reversed Friday.
Perhaps the bear market is still alive? If the daily CLOSES above the red ellipses, however, new highs will be attempted before the end of the year.