SPX rallied today but somehow the day actually ended up looking kind of bearish. Futures were up nearly 1% for most of Sunday night but faded into the cash open.

SPX rallied back towards the overnight highs but then reversed and gave up more than half of the gains. The daily candle is red as a result and honestly most of the day was pretty bearish.

When overnight moves fail to hold and reverse intraday, that usually means that the move is going against the grain – so this time with a failed rally, we can assume that the trend is down and today was an “against the grain day”

I want to share a slightly different daily chart today that really highlights the low volume environment that we have been in. Obviously the spike from the last FOMC day was an anomaly but we can see that the volume has been pretty consistent lately despite the down move. Usually down days have much higher volume but right now that hasn’t been the case.

It’s rare to see the volume so low at this time of year, especially during a down move and heading into an election cycle and earnings.

Where is the liquidity?

The other more concerning part of all this is today’s advanced decline numbers. Remember, at one point SPX was up nearly 1% and the Nasdaq was up 2.5%. And yet…

…we have the majority of stocks declining.

In my weekend video I raised the point about what happens if we have a 90% decline day? A day where 90% of the stocks are down?

Are we close to that day coming?

Internally, today was incredibly bearish even if the price didn’t exactly reflect it.

Sell the rip seems to be the theme, let’s see how long it lasts

Good luck!