Tuesday Market Action

That was quite a jump in the SP500 today.  From yesterday's low to today's high it covered about 65 points.  But from yesterday's close to today's close, it only covered about 12 1/2 points.  Lots of volatility these days.  The jump up this morning basically doubles the width of the trading channel I mentioned yesterday.  But momentum fell all day, and with a late afternoon slide, most of the day's gains were given back, and the open gap is mostly filled in.

This looks like a retracement of the entire drop from the top at 1220.39 on 9/20 to the bottom at 1114.22 on 9/22, covering 106.17 points.  The chart shows retracement levels of .618 (1180) and .786 (1198).   This morning's jump took the index past the lower of these, but today's top of 1195.86 didn't quite make to the higher value.  And that fall off at the end does not look healthy. 

This was a fairly impressive gain, while it lasted, but it does not have an impulsive look, and it may well have finished at 2:14 this afternoon.  Reaching the .786 level is very ambitious for a retracement.  My best guess is that the decline has resumed, as of this afternoon, and we can expect it to continue in earnest tomorrow.

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