Yesterday was the first interesting day in the market in almost a month. The power trend that has continued to grind higher on the daily chart was perhaps interrupted a little bit yesterday as the market left a large red bar on the daily chart. It should be noted that while the QQQ had one of the biggest red bars of the year, the SPY actually maintained a fairly neutral bar. While it was red, it was not huge and it did leave a higher high and a higher low on the daily chart without encroaching too far in the prior days trading range. It has become the pattern that day two, today, will be a critical day. Often times the strong stage II dominates and the red bar is quickly erased. But if you’ve noticed, any time red gets follow through to the bearish side it usually continues more than a day or two. Given the extension of the daily chart the market could pull back to the area at “1” and still be considered very bullish even on the daily chart. While a similar area exists for the SPY, it is not as easily defined due to a slightly different pattern and is not marked on the chart; that area would likely be somewhere in the 197 to 198 area.