Last week we saw stocks move sharply higher as traders started to cover their short position, adding fuel to an already oversold market ready to bounce. Overall volume was not that strong on the move up, which is a bearish sign. On Friday afternoon we saw the SP500 continue to move into the $1,075 resistance level on very light volume. This indicates to me that buyers are not willing to pay these higher prices because the market has moved up so quickly and the fact that it's trading at a resistance level.
I feel the market will gap higher on Monday just like we saw on June 20/21, deep into a resistance level, and the big money will short the pop sending it sharply lower.
Gold looks to be shifting its momentum from a down trend to an uptrend. It's forming a reverse head & shoulders pattern which is shown in my technical trading report video covering gold, U.S. dollar, SP500, market internals and on balance volume.
Weekend Conclusion:
In short it looks as though the market is at a critical pivot point. We could see prices stall out here and continue the down trend or see strong buying step in, sending prices higher in the equities market. We need to wait and see what type of price action unfolds in the coming days.
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