Some scary action in the markets today if you're a bear. We had a FOBO (Fake Out Break Out) to the downside this morning on worse than expected economic reports. International Trade and Consumer Sentiment disappointed analysts. We broke down on SPY and tagged yesterday's low. SPY formed a Tweezers Bottom and shot north from there. The Financials (NYSEARCA:XLF) and Russell 2000 (NYSEARCA:IWM) are showing relative weakness still, which provides little faith for this intraday rally. It looks like the Financials and Russell 2000 will be the indexes that lead the markets lower from here.
I expect SPY to close within the 109 to 110 range today. A 50% retracement of yesterday's sell off is not surprising. Some would even call that a sympathy bounce. If SPY closes above 110, that would be very bullish going into Monday. Below 109 would be bearish as it is continuation to the downside and would confirm the beginning of a down leg.