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Thursday, June 28, 2012

Daily update 6/28

What a bizarre day.  Lets start with the daily SPX chart.

We have what looks like a hanging man or hammer candlestick with pretty big volume.  I don't think it is near enough to a recent high or low to determine which it is.  We closed above the 18 SMA again, but still have neutral price bars.  Here is the 195 minute SPY chart.

We still have neutral price bars on this chart also.  The last candle touched both of my trend lines I had on the chart yesterday.  The market sure made me look good on that one, lol.   This looks like we are forming a descending triangle pattern.  On this chart we see the volume was slightly larger on the down price bar then the up one at the end of the day.  Since the trend lines are getting very close together now a break out of this pattern cannot be far away.  Check out this 30 minute SPY chart.

Look at all the volume on the last bar.  That looks news driven to me, and it started right after they announced Merkel said she was canceling a press conference.  I don't have any idea if there is any meaning in that action for tomorrow or not.  In between those two trend lines the price action could be sloppy.  A break out either way should get some follow through.

Both the McClellan oscillator and the 10 DMA breadth charts have been positive almost the entire month.  This indicates there have been plenty of people buying into this market.   This is similar to what happened back in May.  We had a sideways pattern with positive breadth that ended up breaking down with a big move.  We have had a longer positive breadth pattern now then that one was.  That makes me think that if we do break down the odds of the early June low holding may not be all that good.


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