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Thursday, December 27, 2012

Daily update 12/27

Clearly the market is still focused on the deal talk out of Washington.  It sells off when the talk is negative and rallies when it thinks the talk might be positive.  The talk all sounds like games to me to make people of both parties believe their party tried to do something.  I am sticking with the we are going over the cliff call at this time.  Here is the daily SPX chart.

Quite the hammer candle today with a long tail.  Was that an important reversal?  The volume was way too light to make a call on that.  Lets zoom in to the 195 minute SPY chart.

SPY had a blue bar indicating price closed below the lower Bollinger band and was extended.  The volume was somewhat elevated, but not all that high.  The second bar, on the talk of the House being reconvened Sunday night, ended up retracing the blue candle.  The volume was higher then the first bar.  Lets zoom in to the 60 minute SPY chart.

This chart also shows the surge of volume on the big rally bar late in the day.  However, it stopped at the hourly 18 SMA.  SPY had a strong bounce from an oversold condition, but it did not do enough to break the down trend yet.  Will there be more upside follow through tomorrow?  What will the talk coming out of Washington be?  I am afraid I don't have a crystal ball. 


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