On Friday the market opened neutral and initially tried to rally as it traded above the prior day’s high. But this was simply some follow through to the prior day’s rally. The market hit the high of the day at the very beginning of the 10.00 reversal time and then fell sharply and traded below the prior days low, not setting the initial low until the middle of lunch. It retested that low twice before making a late day rally to retrace about half of the day’s decline. The SPY was stronger over the last two days and the morning decline actually made a higher low from the prior day. We discussed the other day how the rally from Thursday did not end the hourly downtrend and the market simply followed through on the Thursday afternoon rally and then rolled over continuing the hourly downtrend. This is what was considered to be critical to evaluate when the market has found a bottom on the daily chart. It has not done that yet as prices did not follow through to Thursday’s rally. At one point there was a large red bar on the daily chart Friday, but that was negated as the market rallied back halfway during the last hour. Trading above the high of the last two days and holding that high past the 10.30 reversal time is what is needed to see the market effectively form a bottom on the daily chart to continue its stage II uptrend. Until then expect sloppy patterns and continuation lower if prices cannot trade above “1”. Today a gap below “2” would likely immediately continue the stage IV hourly chart.