Very interesting. S&P 980 has been a rock for the bulls this week... we tested this morning and simply scoffed at the bears who thought the market could go down through it. Remember, each test of a level weakens it - this is now the 3rd day of testing that level.
Yesterday I was looking for an upward gap to fill on the SPY (S&P 500 ETF) at 99.70. That did not happen, so I thought maybe we'd do it today in premarket and early trading. Then China had to do their thing. But no worries, we don't need no stinking China... it's all forgotten now and we in fact just filled 99.70. Magic.
So now we've filled the downside gap at 98 (Monday) and the upside gap at 99.70 (today)
Now it gets interesting to see what is next. Bears simply must be exasperated here since buy the dip works over and over. (and over) (and over) Volume on these rallies is getting really weak - but that doesn't make the pain go away for the shorts.
As we said yesterday it's all sort of white noise here between S&P 980 and 1020; the break out of this range will be where the next intermediate money is to be made. But it will be clear bulls won't go down easy.