S&P 500 - August 23, 2010 - Intraday

It seems like we were correct thinking that that we had a complete wave set after the low of Friday (as speculated in the Friday's intraday post).

Also, it seems like the rising bottom of McClellan and the Arms divergence that I mentioned are doing their parts this morning


But more is needed from buyers to turn a technical bounce based on a complete pattern and oversold breadth in to something more meaningful.

Bulls need to get the index above 1085-1090 cash and try to stabilize, and improve the breadth.



If they can do that, then we'll have a host of MAs in the 1090-1000 level.



As market digests the first thrust of the day and settles back, we'll see if this is really a bounce or rally or just an early morning pressure on the shorts.

Bulls have been weak, and, IMO, are running out of room. Their situation here does not allow for much more weakness and indecision.

This is a tricky market that sells the resistance and buy the support. At some point, it will make up its mind and choose a direction. Technicals indicate that the broader path of least resistance is down. To detect potential for change we need a short term higher highs and lows and improving breadth

As long as 1070 holds, index has a chance at higher prices. If 1070 fails, the high of the day becomes an important short term resistance.