STOCKS CONTINUE TO TEST BOTTOM OF TRADING RANGE -- NO UPSIDE FOLLOW-THROUGH YET FROM LAST THURSDAY'S UPSIDE REVERSAL

NO FOLLOW-THROUGH TO KEY REVERSAL DAY ... Last Thursday's upside reversal day on strong volume raised hopes for a short-term rally attempt. Unfortunately, there's been no upside follow-through since then. The daily bars in Chart 1 show the S&P 500 losing ground over the last two trading days. The S&P 500 is much closer to its recent low than its early November peak at 1007. It's also still well below its 50-day moving average. None of those trends are very encouraging. The hourly bars in Chart 2 show the two key chart points to keep an eye on over the very short-term. The S&P would have to close above Friday's intra-day peak at 916.88 to keep any hopes for a short-term bounce alive. A close back below last Thursday's intra-day low at 818.69 would resume its downtrend. Bear in mind that these are only short-term moves being described here. The major trend remains down with no signs of a bottom. We'll take more in-depth look at the various markets after today's close.

Chart 1

Chart 2