$spx, $indu — a reversal day?

2010-05-17-spxToday looks very like a reversal day.  After markets selling off earlier in Asia an excursion over 100 points down was completely expectable.  To reverse field and finish up on the day is characteristic of a reversal day.  As always (readers will begin to think this is our middle name) we are suspicious.  But at the very least for the bull case this is more optimistic than finishing at the bottom.  That would have been a very black bar indeed with pessimistic expectations.  Possibly very pessimistic expectations.

Very crucial business is going on right now.  The trendline that price is dancing around is 11 months long (m/l) and its decisive penetration would be very bearish.

Buying in any quantity here is very speculative.  Several days at least will be necessary to determine whether this sell off has lost steam.  We will indicate when we think long positions are prudent.

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