Today was the day the bears should have pushed the market down through support: they had the gap-down weight and momentum right at the open with the GE news. The following 4 day chart shows how pivotal/dramatic this week was: On Tuesday we close at the lows and through 82 support; all very depressing complete with "end of the market as we know it" calls. On Wednesday we gap-up, test that same support, but close at the highs, producing numerous "this is the bottom!" calls. On Thursday we again tested the 84 resistance. And today, the best day of all, we opened at support and rallied all the way back to 84 before closing off the highs. Please note that we also enjoyed poor economic/earnings news on Thursday and Friday. We'll hold off our enthusiasm until we close over 84 (and swing like mad to the bearish side on a break of 80.5-80) but so far, so good.
Added bonus of down-trend line break now coinciding with daily 84 resistance.
Note similar chart in XLF.
As you can see we're still very much in a danger zone and if this rally has any chance then financials have to pull-up and away from 8.7 area support.
FAS gives a more clear picture than XLF of how important our current level is: A conclusion is coming soon as we either break up through this down-trend or reverse down.
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