By Mr. Ice
Bounce continued on a good jobs number and hit the 50 day moving average pre-market on Friday. Europe appears set to recapitalize the most troubled banks and backstop the sector, but there was a race to downgrade various European countries' debts Friday morning and that added to the morning sell off.
Bulls were putting together a late day run and ran out of gas at the finish line. This was not surprising, given the huge rally since Tuesday’s technical bullish reversal on a monster bullish engulfing candle. The level of 1150 to 1155 in the S&P 500 had morphed into interesting support in the last two days.
In the next four to seven sessions, if we can get a bit more back and fill and then a follow-through session with volume to confirm the fledgling rally, we may finally be breaking the trend of “lower highs".