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Friday, August 3, 2012

Daily update 8/3

I mentioned last night the payroll numbers might surprise to the upside (+163,000) due to seasonal adjustments.  The household survey released at the same time showed -195,000 jobs for the month.  That is a pretty wide discrepancy.   The truth may be somewhere in the middle which would be fairly close to zero.  I think the seasonal problems will be much less in Aug. and we will get a better read.  I suspect the initial claims will start to rise again, but we will see about that.

Last night I wondered if the late afternoon rally might not continue.  Unfortunately most of the move was before the open.  Here is the daily SPX chart.

We tested the 7/30 high, but failed to stay above it.  The volume dropped considerably today.  Is it different this time and the market keeps pushing higher?  Beats me.  Check out the weekly chart.

The last bar is a hanging man that closed at new rally highs.  That could be a warning sign.  Just look at the recent bars though.  This is an ugly price chart.  We have a lot of tails in both directions.  This is a major battle being waged.  Check out the breadth chart.

This chart is weaker then when we were here before.  Check out the Russell 2000.

Small caps are really lagging since the beginning of July.  Check out the transports.

Same here.

My market internals are still on sell signals.  It will take a few days for them to cross back into buys.  Will the market hold up long enough for that too happen?  How do you predict what the market is going to do when it is gapping up and down in a big way every day?  All I can tell you is the daily SPX chart has a bullish bias and market internals have a negative bias.  Until they agree the market is unstable.  Be careful.

The chart practice site has been updated if interested.


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