Today is a day that will test the persistence of this market rally. A few events came together that to us suggest a level of distribution. They are:
- The 1840 level on the S&P 500 that had provided pretty reliable support failed decisively.
- The S&P 500 registered another negative outside reversal day (a day in which both the intraday high is higher than the previous day's intraday high and the close is lower than the previous day's intraday low), which brings the total number of negative outside reversal days to six over the last three months.
- The Index finished down by more than 2%.
These are pretty rare events and their confluence is somewhat noteworthy. We haven't seen the three month running total of negative outside reversal days reach a level of six since 2006 and we haven't seen the six month running total of 2% down days reach a level of three since the beginning of 2012. The Index is currently sitting on the 100-day moving average which has provided extremely good support over the last year, so these next few sessions will be interesting to watch.
