This chart looks worse than it is given the SPY going ex-dividend today to the tune of $0.52 (unconfirmed). See the GSPC to the right for a truer graphic. While we retested and extended yesterday’s down range, note the positive turn in the AD line, advancing volume and tick. I expect some initial resistance at the VWAP, but looking further out we remain oversold, 52 week new highs have held their trend, pressure is off the VIX, and we are entering positive holiday seasonality. OPEX volume is certainly through the roof. On the bearish ledger, the question that needs to be answered is how much of that volume is expiration related, and how much is true distribution. Hard not to imagine a good deal of the latter.
