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Monday, October 8, 2012

Daily update 10/8

I guess five upside gaps in a row was all the market could manage.  Here is the daily SPX chart.

SPX tested its 18 SMA today, but held above it.  Last Thursday we broke above that MA after a few days below it.  Two days later we still have not closed above Thursday's high.  The bulls are not aggressively buying here so far.  Closing back below the 18 SMA now should indicate a deeper pullback then the last dip is in the works.  Lets zoom in to the 130 minute SSO chart.

SSO held the 50 and 18 SMAs today.  Price is right in the middle between the Sept. high and low.  I would think we would bounce or break tomorrow and begin a test of one of those two extremes.  I think the odds are a downside break.

Here is the current breadth chart.

The McClellan oscillator is negative and the 10 DMA breadth chart is barely positive.  It will not take much of a negative day to generate another negative crossover.  The volume part of the 10 DMA chart did not get a positive cross yet.  Look at the chart back at the June low and notice how similar it looks to now.   The divergence is very obvious.  Are the dip buyers getting tired?

Chart practice is updated with CHKP the stock for today.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.