Market Closes Off its Lows

On Tuesday, the general market opened weak and deteriorated throughout most of the day. However, by 2:30 p.m, the market found support and managed to close up off the lows. The Nasdaq closed down -8 points (-0.20%), the S&P lost -5 points (-0.32%), and the Dow was the biggest percentage loser, falling -94 points (-0.59%).

Volume for all three indices was higher than Monday's volume, so the sellers were the dominant force today. The S&P has now closed below the 18 November swing high, and the next support is at 1,775. Despite the end of day bounce, the hourly S&P is still in a short-term downtrend. That means the market will likely have to retest today's low before it can reverse to the upside. 

A retest does not mean price will go lower; it just means another swing down to test support. The retest may stop above the previous day's low or it may reach yesterday's low (or go slightly below it).

Today's action made a clear pivot high off the 29 November bar. Technically, the market is in a short-term downtrend (swing). The S&P and Dow closed below their respective 10 SMAs, and a lower close tomorrow would be a bearish signal.

The Nasdaq, which has been the market leader, remained above its 10 SMA. The index also closed midrange for the day (doji), showing the buyers pushed back.