Market Update

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The blue labels are the ones I have been posting primarily. The pink labels are an alternate I see as a possibility depending on whether the markets continue to advance or to fall from here.

While the S&P 500 has filled and closed the May 20th gap down, the IWM (Russell 2000 ETF) and DIA (Dow 30 ETF) have not managed to close above the gap. The DIA formed a doji on Friday that filled that gap but closed below it. That is possibly a bearish reversal candlestick.

If the market does not top out right here, then I expect a move up to the green rectangle resistance area before a possible intermediate term top.

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Based on the hourly chart, there is now bearish divergence suggestive of a pullback for at least a few days. Also, Friday was options expiration and since the March 2009 lows, pullbacks have tended to occur in the 2 weeks following options expiration. And the post June options expiration is one of the seasonally weaker periods looking back at past years.

I don't have much more to say than that. This could be just like the other intermediate bottoms over the last 15 months or so. Or we could be in the early stages of a larger decline and this will be an unexpected failure.