TVO Market Barometer 8/17/15

TVO MB 8-17-15b

After a gap down at the open, the market made a decisive turnaround and SPY added more than a point to close above the 50 DMA. We know that big institutions set their sights on this line in the sand as a strategic buy point, and overall volume rising 2% (according to our Heat Gauge) shows they were right on cue today. The last 3 times SPY tried to penetrate the 50 day (7/14, 7/29 and 8/10), the bears were ultimately able to drive the herd back down, but on all 3 of those occasions the rise was on declining volume… and without volume, SPY’s efforts to stay afloat were mostly in vain, and consequently, any time spent above the 50 (and SPY 211 for that matter) was very short-lived. The bulls probably would’ve liked to see more volume behind what they got today, but things could indeed build from here and shake up the bears (at least the ones that haven’t already thrown in the towel) into even more of a squeeze in the near term. -MD

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