Not Sold on Today's Bounce

We saw a sharp fade Tuesday, and a little early-morning bounce Wednesday, on the equity side of the equation. I'm not sold on today's bounce in the short term, but even the recent pullback hasn't done damage to the longer trend.

SPY -- Weekly Source: StockCharts.com View Chart » View in New Window »

While the daily chart of the SPDR S&P 500 (SPY) may have bulls feeling a bit better today, I would certainly be vigilant watching this bearish flag setup. A close under $164 would trigger the initial breakdown and could push the fund toward $160 on the downside. A bullish divergence is forming on the Commodity Channel Index (CCI), though, as it has broken back above -100, and the moving average convergence-divergence (MACD) line seems to be rounding. The MACD does need to turn higher, though, as a mere rounding does not indicate a bottom all the time -- it can often be a sign of consolidation, like in a flag pattern. My focus here, though, is still price....369 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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