Market Breadth

It was a long day to finish pretty much where we started. That also forms a doji or star on the daily chart.

I've highlighted several past doji days to illustrate that a doji or a slightly wider body candle, a star, are often short term reversal days. Today the US equity markets followed the overseas markets with not much on the economic data front, the market was obsessed with the crumbling E.U.

I looked at breadth today and found the following,

Only 7 stocks in the NASDAQ 100 closed in the green, 3 closed neutral for the day and 90 closed down.
The Dow had only 1 gainer of +.29% (MCD)
Of the 1901 Russell 2000 stocks, there were 259 gainers, and 43 that closed unchanged.
The S&P-500 had 37 gainers and 3 closed unchanged.

Internally the IWM had the best breadth, but the worst price performance; it too posted a doji-star. The largest price/volume relationship in all 4 was close down/volume down.

Here's a look at the closing charts

 Like most other averages, the DIA showed a pretty strong 15 min chart

 Here's the IWM doji-I'd like to have seen volume much higher today.

 Surprisingly strong 15 min IWM

 IWM 10 min

 IWM 5 min

 QQQ 5 min was the strongest for the Q's, the 15 min wasn't horrible, more like in line or a bit better.

 The SPY has long been traded by day trades using a 50 bar average on a 5 min chart, it found some support there at the close.

And the SPY 15 min chart

I'd feel much more comfortable suggesting the market today may have entered a 1 day oversold condition if the volume was higher. It would suggest short term capitulation. As far as the price/volume relationships within each average, Price down/ Volume up was not far behind price down/volume down. That taken with the doji/stars as well as some of the 15 min charts refusing to drop with price, suggests to me that today may have been used as an accumulation day for a bounce up, whether dead cat or otherwise. I wouldn't go so far as to say it's high probability, but I would say it's the highest probability of the multiple scenarios we have to consider.

Today's 3C action was somewhat similar to the reversal day on 5/17

I would even say that the apparent divergence now is stronger then 5/17's.

Looking at the 15 min chart, on 5/17 3C moved down to confirm price action, today that didn't happen so from a 15 min chart perspective, this divergence also looks bigger.

Tomorrow is another light day on the economic calendar, I believe new home sales is the only thing of note.

I'm going to look through some more charts and keep an eye on the Euro/USD, if anything interesting pops up, I'll post a follow up.

Lets not lose sight of the big picture though...

We've seen this market go from good price confirmation to a very strong negative divergence.