wheres wally wednesday, page-164

and that spx dive late in the session.. given the recovery, I suspect the sellers exhausted themselves at that point, again. The selloff wasn't surprising in its origin level, it was an onvious one where sellers would gather. The speed of the recovery hints not only at short covering but that there weren't many genuine sellers left. Volume suggests that it was a major day in the bull vs bear battle, and the bulls won conclusively.

The VIX came off significantly and looks to be trending down tho its still in a high range suggesting continued volatility. Put/call are almost into negative territory, more calls than puts. Breadth was pretty good. All sectors rose with the biggest bounce coming from small caps last night, and they were the hardest hit in the correction so far.

In this zone 1506 - 1497 there is heavy duty resistance - the fib.62 retracement of the decline, the 50 ema daily, the 34ma, and a major price resistance level at 1500 not only in recent times but also an old lower closing high back in 2000. If the rally over the past three days was simply an oversold bounce in an ongoing down trend, then I'd expect the rally to conclude and price to turn down at this level. And indeed it did last nigh - and to return to my point above - it then bounced and made up almost all of the lost price within the session. As i keep saying here, its not resistance that is the only big thing to look for, its how markets behave at resistance. spx last night didn't end up giving up much to the bears at heavy resistance, on a closing basis.

I trade the market I see, and I know some of you will howl me down but this is starting to look very much like another shakeout in an ongoing bull run. I'm looking for trend accelleration now, maybe THE blowoff we have to have. Consolidation at this level (1480 -1505) would also be bullish. That being said, if the market is to continue down overall, it will most likely do it from around this current range. A break of 1473 on a closing basis will probably signal further declines imho.