I don’t see many indications that this market wants to go down yet, other than the lack of demand yesterday based upon lower volume, and the inability of the Composite to hold near it daily highs.

In classic Wyckoff terminology, the Comp is exhibiting a shortening of the thrust to the upside, and an inability to close near the high of its daily range.  During the last three trading days, the Composite candles are an Upthrust, and two Spinning Tops, all which indicate uncertainty, and lack of conviction.  Yesterday, the Composite closed at 35.32% of its daily range, and on Tuesday it closed at 37.18% of its daily range.  This tells us that some traders and institutions are selling into strength and are taking profits. The SPX also shows profit taking with a close of its daily range at 37.53%.  The SP1500, a broad cross section of stocks, closed at 38.66% of its daily range. So what does this mean?  To me, it means parts of the market are struggling to go higher, and traders are reluctant to take on more risk.  The negative candles with their closing prices below their opening prices show selling into strength, and the lower volume yesterday means demand fell off from the prior day.

On the positive side, the small cap stocks remained strong and both the RUT and the SP 600 closed in the upper 1/2 of their daily trading ranges.