So we got a sell-off this morning after a gap up. We have seen many sell-offs in the past week that have been thwarted and reversed back up to see even higher highs. So it would make sense to want to buy this one. However, of all the reversals, this one has been the slowest to move its way back up higher. At this point, it looks to be just consolidating in a tight range which could be looked at as a bearish signal. It already touched its 50% reversal from this mornings highs, so we'll have to wait and see if it has the strength to move back up and go higher.
Maybe we are seeing a waning cycle of reversals. Leading up to the markets making new highs over the past week, we have seen many misleading sell-offs. The first one reversed quickly with strength, and each one after seemed to reverse with a little less strength until this morning's reversal (which happens to be the first one since breaking the 52+ week highs). This one looks pretty weak. It still remains above the lows and may even eventually move all the way back to today's highs, but perhaps it is a sign of a weakening market overall. If we do move back up and we see another sell-off, perhaps the powers that try and stop it won't have the strength next time around.
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