Now that the SPY has scratched the itch to back fill the May 2/3 gap, the correction should be able to get back underway. With prices only barely rolling over after the back-fill of that gap, it is still much too early to state with a high degree of confidence that the bounce off the 204 SPY support & slight overshoot/bounce off the QQQ 104.90 support level is complete but I do believe that is most likely the case.
SPY 10-minute May 10th
As I recent posted in the trading room, as of 1:00pm EST, the QQQ was tracking at nearly 1/2 the 100-day average volume (55%) while the SPY was tracking at exactly 1/2 (50%) of its average daily volume over the last 100-days, a sign of non-confirmation to breakouts today above the 106.80 resistance level on QQQ, 207.00 on SPY & the 111.80 level on IWM as very low volume breakouts have a considerable higher rate of failure than those that occur on above average volume.
Of course price comes first with volume a distant second so what I’d like to see now to firm up my case that this is merely a counter-trend bounce in a larger move down would be to see price fall back below the 106.80 level on QQQ, the 207 level on SPY and the 111.80 level on IWM, all which were recently broken support levels that were re-gained on today’s low-volume rally.