Bearish Window Is Closing

Last week the market broke through major technical support levels, but we have not seen any follow through.

PRE-OPEN MARKET COMMENTS WEDNESDAY - Price is truth so let's focus on the technicals today. They tell us what buyers and sellers are doing and to what degree. When we have a long red candle like we saw Friday through a major support level on heavy volume, that is typically a warning sign. We expect an attempt at a bounce, but ideally we want to see that move squashed. That is a sign that sellers are aggressively reducing risk. We don't mind retracement back to the halfway point of that red candle, but we don't want to spend much if any time in the upper half of the red candle. Yesterday, the market regained almost all of the losses from Friday. It is resting just below the 50-day MA.

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