Quick technical note on the S&P 500. Today we are looking at price, volume, and moving averages. Below is a chart of the index since the October 4th key reversal. Note that this reversal day has the highest trading volume on the chart. We then go into a rally that culminates with a breach of the 200 day moving average on the 27th, which is the 2nd highest volume day.
Since then, the price advance is rejected sharply on Oct. 31, comes back up above the 200 day on Nov. 8 – but reaches a lower high – and is rejected a second time. The two highest volume sessions since the 27th high are the down days of Nov. 1 and Nov. 9.
Where does this leave us? To me we are at a critical juncture. Repeated failure to hold the 200 day is bearish. If we keep failing at the 200 day, reaching lower recovery highs, and seeing higher volume on down days than up days, it would turn out outlook bearish.