Wednesday’s reversal on higher volume had a bearish tinge to it, no doubt, but the market is very much like a cheap drunk. It rarely remembers what it did the prior night, and just carries on as it pleases no matter what faux-predictive technical evidence its behavior provided the prior day.
The S&P 500 Index was the cheapest drunk of the bunch on Wednesday with its higher-volume outside reversal to the downside. It came right back the next day with an upside gap opening that held up all day. But note the stalling action as the index stalled off its intraday highs to close near the lows of the intraday price range.
The S&P finished out its best quarter in five years with a churning day on higher quarter-end volume. Following Wednesday’s outside reversal to the downside on higher volume, the index hasn’t done much, and has yet to fully resolve Wednesday’s bearish action. We will get a better sense of this as we move in to the new trading month.
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