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Friday, September 7, 2012

Daily update 9/7

A little follow through in SPX and some of the laggards I mentioned yesterday.  The cyclicals did the best.  Here is the daily SPX chart.

I don't think this tells us a lot yet.  The volume was good again.  However, check out this chart of SPX from the high last year.

Last year after the break out SPX continued up for several days and still failed.  There were a lot more indexes involved in that break out then this one.

Here is the COMP daily chart.

Yesterday it closed one point above the spring high.  Today it added a fraction.  It was the other major to break out yesterday if you can call it that, LOL.  Look at the chart from last year.

Last year the COMP followed through the second day very nicely, but still failed.  The DOW still has not taken out its Aug. high yet.  There were no new index break outs among the ones I look at.  SPX is not going to stay up here and move higher unless more indexes break out.  The jury is still out at the moment.

It seems nearly unanimous now that the FED will do something at the next meeting.  I think balance sheet expansion QE program is not going to happen.  The more likely scenario to me would be to extend the low interest rate date out further.  Gold seems to indicate a lot of people are expecting balance sheet expansion. Will there be general disappointment in the markets if that does not happen?  We have multiple tops and poor fundamentals.  If this break out fails there will likely be considerable down side.

Chart practice site has been updated if interested.  http://traderbob58-chart-practice.blogspot.com/


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