SPY Update

 The red trendline represents the area in which the market broke out, it's also the area in which we wanted to watch for a false breakout. Much like PCLN that was in the same situation on Friday, having crossed below the breakout area, I warned that PCLN would likely see a bounce from there, it's just how the game goes down.

The positive divergence noted Friday in the SPY has continued so we're seeing some upside gains right now, at this point it is unclear how long they may go on, I would lean toward this being a simple reaction to the important trendline just below and the typical volatility sen around these areas when first approached.  We'll look at PCLN next as it relates to the action in the SPY.

At this point I don't have any reason to believe this is part of a big move up, but there's always a purpose to running price up after an important trendline breach so the action after a breach like that isn't usually luke warm. While the big picture may not be in question, most traders aren't looking at the big picture and rather tend to focus on short term moves. This is why I say the action is rarely luke warm, Wall St. is looking for a response when they run price up after an important breach and usually that run up needs to be believable enough to gain the bulls' confidence.