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Monday, September 17, 2012

Daily update 9/17

A little profit taking today, more in some indexes then others.  Here is the daily SPX chart.

SPX closed back inside the upper Bollinger band today.  It is still a long ways from the 18 SMA.  A normal pullback could still be significant.  The transports, cyclicals, SOX, XLB, and XLF were all down 1% or more today.  This suggests there was some sell the news going on.  It seems likely we will see more sideways or down in the next few days.  Here is the 60 minute SPY chart.

It has been a long time since SPY has contacted the 50 SMA.  It is more likely to contact that before it makes a new high since the market is so over bought.  If it decides to wait for it to catch up to price, it could be a sleepy week.  If it decides to have a normal pullback things could get more interesting.

Check out this chart of new highs.

Thursday there were over 800 and Friday there were over 900 new highs.  I noticed this, but did not mention it until I had a chance to look back at history.  Since 1990 there was nothing even close this event.  It is very rare to get over 500-600.  The majority of times it has gotten over 500 have happened since 2009.  I mentioned the high volume could be a short term volume climax.  The new high data indicates it was a buying stampede.  There is a risk that was some kind of upside capitulation event.  Since 2009, the mildest sell off after getting around 500 new highs was Nov. 2010.  The other times were the bigger sell offs in the spring of 2010 and summer of 2011.  I guess we will find out what happens this time.

Chart practice has been updated.  Today's stock is STX.



Anonymous said...

Great update. Thanks, Bob.

Traderbob58 said...




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