Yesterday's Closing Market Post...

Yesterday toward the close I posted the following (please take time to read as it will give you some insight into market behavior).

 SPY daily chart pointed out yesterday. At the white box we have a strong reversal candle (Hammer) providing support. Yesterday at the white arrow this support was broken. Technical analysis teaches that one should go short on a break of strong support. However more and more, the tenants of TA are undermined to catch traders off guard, cause false breakouts and bull and bear traps. As I mentioned in yesterday's closing post, if the SPY can get back above that level either on the close or the open this morning, there's a strong likelihood it will send the averages higher on a short squeeze.

As you can see, yesterday the break below that important support level was accumulated. With the sell-side demand, it's easy for Wall Street to buy up decent size chunks and not stand out. This morning we are back above that trendline.

It's still early a.m. retail dominated trade, but this is a good start to a possible bounce higher. The important thing to take away from this is, conventional analysis is now used in the opposite way by Wall Street. What should have caused major selling, is now used to cause a short squeeze. If you have been using technical analysis over the last 5 or 6 years, there's an adjustment and a new understanding of the game that you must adapt to.