Today the Market Internals told us that higher prices were not likely to follow. We had a large negative candle and all-time high. Is the music still playing?
The SP500 had significant selling pressure and stopped at the lows of October 25th.
The big question now is to stay long, do nothing / wait or go short. As I many times say. Nobody knows what the market is going to do, however that there trillions of dollars at risk every day. Thus some people might know more than others.
There is a big expectation for that job number tomorrow; it might not be so good for the markets when many people decided to removed so much cash from the NYSE and NASDAQ today.
The positive side is that short term money was in control today. The ES rebounded just above the 20 day simple moving average (second chart below). If it was long term selling tomorrow we can see levels of 1735 in the SP500 matching Fibonacci retracement levels.
Tomorrow the open will be dictated by Asian and European price action. Remember the ECB action today: ECB unexpectedly cut its main benchmark rate by 25 basis points to 0.75%. Euro is falling against the dollar. Gold investors should take note that the reason behind ECB rate cut is fear of deflation.