Feb 18 , the market rallied on relatively low volumes, but rallied impressively especially at the last hour of trade. Do you think the big boys were playing games, perhaps convincing people to buy when they should not buy? In the last 10 minutes of trade, you really saw a large volume selloff on the SPY, and that should have been warning signs. After all the SPY traded up to the 50 day moving average, the 61.8 fib retracement number, and frankly failed to convincingly break above a key resistance level (notice the little topping tail). And what does the market do after hours? S&P futures are down 9 points because of the FED raising the discount rates.
The market tried to break to the upside today, and it looks like it has failed. I have been taught, that when the market tries to do something and fails, it will reverse to the opposite direction violently. So what will happen? Well I guess I'll be a little bolder and say that we're probably gonna see some more downside pressure in the markets. I could be wrong, and the markets can "reverse the reversal", but it appears likely we'll see SPY prices closer to the 200DMA at what appears to be 103 now. Once this correction has run it's course (or a "reverse the reversal" happens), then the last final leg in the market rally will likely transpire. For short term traders be nimble.
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