The market moved back up to the 6800 level, but can’t seem to break past it. The 6800 level is now looking like resistance instead of support. If it cannot close above it soon, the move is likely going to be lower.
The hourly chart is interesting. The market is trading in a clear channel lower and cannot seem to break it.
The only way for it to move higher is to break the channel. There seems to be considerable resistance in doing so. What happens from here is anyone’s guess. It seems like the market has no interest in breaking the channel at this point.
Here are the scenarios I laid out on Sunday. At the moment, it looks like Scenario Two is the most likely to happen:
- IF the market continues lower on Monday, all bets are off and we are likely going lower with a possible retest of the 6550 level. It means the buy the dip folks don’t have enough cash to overcome the sellers and the bears run wild.
- IF the market bounces up to the 6800 level and then reverses, same scenario, we are going lower with a possible retest near 6550.
- IF it can get to 6800 and hold, moving back up to 7000 is a more likely outcome. Then we rinse and repeat for the next attempt for the market to decide a direction.
Finally, we are only partially into March, but the MACD histogram has flipped to negative. It is looking more and more likely we are going to get some sort of pullback.
