A Trend Shift Could Be Under Way

Monday I introduced the idea of trend-failure probability rates -- and, appropriately, the market has responded with an attempt to transition its trend on the short-term time frame, on which the probability of such a transition was reaching an extreme. Tuesday it came close, but no cigar -- at least not quite yet. Here's an updated chart using the SPDR S&P 500 (SPY).

SPDR S&P 500 (SPY) -- Daily Source: Investools.com View Chart » View in New Window »

Within the swing point low (SPL) pattern that would result in trend transition, the low is $134.29. Tuesday's low came in at $134.46, so the probing is on. In order for a transition to materialize, though, the index needs to trade close under that price point. I would think that will probably happen sometime later this week. In the meantime, there is a good chance of an attempted bounce today. I say that because, although volume expanded on the S&P 500 Tuesday on the large point loss, that wasn't true across all indices. In fact, there is divergence with the Russell 2000, as that index now wants to bounce, having already completed its extension lower....368 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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