So the markets kind of held together today but it sure wasn't what could be called a strong follow-through day. Tomorrow will be the test of yesterday's surge and its anybody's guess how that will shake out. Best idea is to be small. Our 3 day low model and M3 have reverted to cash while LM is still modestly long the SPY.
Of some concern is the status of the DJ Transports, which have now clearly broken below the 8600 level. While DIA and SPY prices have bounced off the March lows the transports have not followed suit. This is worrisome to say the least in the longer term and highlights the current critical juncture that faces SPY.
If we do get a Trap Door on Friday or Monday the next leg down could be painful.