Smack Down - Posted by Coolhand

Yesterday, I called recent selling pressure consolidation. Today, I'm calling it an attack (by the bears). The action was quite bearish.

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That huge gap down is reminiscent of how the big sell-off started back in late February, but this one is more pronounced. Price closed below the 200 dma (support) on both charts. Momentum is falling (quickly). Volume was high (not good).

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Breadth remains bullish (not today, but overall), but that's small consolidation given how fast it's fallen.

I reported earlier today that NAAIM was less bullish, but they were still bullish overall as a group. My concern is that something may have changed that may influence the smart money and we won't know about it till next Thursday.

I would not be so concerned except the action is suspicious. Like a switch was pulled (which is what I said at the start of February's deep decline).

It's possible that since the 200 dma was broken, a lot of bulls may have jumped off the train. It could be a bear trap. Maybe. Futures are flat to modestly bullish right now, but a lot technical damage has been done and it may take a few more trading days to get a better idea of where the market is going. If the market doesn't firm up fairly quickly, we could see much lower prices.

I was bullish largely because the smart money finally flipped bullish last week. And I am going to remain tentatively bullish for now, but this market has to convince me (soon) that there really is a floor under it.