Every day that goes by weakens the bulls bounce chances, and today might just be the last chance for a decent bounce from them. Why you ask? Because this sideways action is making a bear flag on the daily chart and just working off short term oversold conditions... which means another drop is setting up. The "when" part is tough to pin down exactly but it's looking like it won't be more then another day or so, like by the end of this week. So I must admit I'm a little shocked that the bulls didn't rally this back up by now. It's a sign of a change in trend from bullish to bearish... at least for the medium term (days to weeks).
So if today doesn't produce the rally up into the 290's on the SPY I'm going to close out my small long position and look for shorts again. This bull bounce is running out of time and the bears are waiting to pounce again. For the short term it's looking like a gap down at the open is most likely, which means that if they repeat the pattern of the last several days they will rally back up later in the day. But again, if we just continue to chop in a range and don't breakout to the upside today I'll have to believe it's not going to happen. Tic Toc, Tic Toc...
