Anything Can Happen

I skipped out a little early yesterday to meet my friend Scott who was in from London with his daughter checking out boarding schools. Didn't see the exact close, but it didn't really change much in the last 20 minutes.

I would have liked to have seen more of a hammer on the S&P daily chart, but whatever. Apparently the market would've liked to see something different too, as the overnight session was all over the place.

Today I'll be looking at higher levels, perhaps 1428-1436. Even higher numbers are possible too -- the 61.8% retracement level is 1442. Why not, this market has been making deep retracements since 2000. I don't think it's gonna stop now.

Getting caught in a weak bounce and rolling over in the low 1420s could spell big trouble, though. 1396.56 would likely be the first stop. It could get a lot worse. BUT, here's a reason why I'm doubting the downside at this point.

That is some remarkable positive divergence between SPY and the ETFs for financials, junk, and high yield credit. So I'm not surprised by the bounce in futures. A breakdown would be a bigger surprise. But that's not to say that it can't happen.

Anything can happen.