I just wanted to write a quick technical observation. On Friday, the SPX seesawed in the wake of the Scottish Referendum news and triple witching and the index struggled to hold its upside breakout in the face of negative divergences:
Traders might be advised to watch if the index can hold this uptrend line on the SPX 60 minute chart:
The bull case is bolstered by the fact that the uptrend remains intact on the DJIA (not shown) and the NASDAQ 100 saw a minor violation but rallied soon thereafter:
On the other hand, the uptrend was violated on the SPX 15 minute chart:
As for the Russell 2000, there was no uptrend on the 60 minute chart:
For a different perspective, the uptrend remained intact on the SPX 15 minute point and figure chart:
The weight of the evidence suggests that the bulls are still in control of the tape - but just barely. Traders should watch how the market behaves on Monday. Can the bulls rally this market, or will the bears wrestle control away from them?
I will write a longer note tomorrow about why the path of least resistance for equities is likely to be down.