As predicted, the market moved into the downtrend line after a gap fill following the open. The downtrend line is falling, so by the time we got there, it was slightly below 8600. All in all, it was a good session, with the S&P 500 closing above the key 21-day and 21-week lines.
Click to Enlarge Chart for Detail
But the momentum on the 15-minute chart was negatively diverging as the market wedged into the down trendline – and we had a sell signal on the day trading version of the Navigator algorithm. Mindful that we had come far from the recent low and into some formidable resistance, some profit-taking would have been in order tomorrow.
And then Meta (Facebook) reported right after the close. They missed their numbers. It is not a good time to disappoint when the crowd is in a bad mood. S&P Futures subsequently erased all of today’s gains, falling below the key 21 (mean) lines:
Click Chart to Enlarge for Detail
What happens after hours does not necessarily carry into tomorrow’s regular session. But if Alphabet (Google) sent us up today, Meta (Facebook) can undoubtedly point us in the other direction. A lot depends on their forward guidance in the conference call later today.
We were looking for the bears this morning, let’s see if they come out of hibernation.
Stay tuned.
A.F. Thornton