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Friday, December 28, 2012

Daily update 12/28

No follow through from yesterday's reversal.  Here is the SPX chart.

Are people finally getting worried that there may not be a deal after all?  Volume declined from yesterday despite the sizable down move.  Here is a peak at the 195 minute SPY chart.

We are a bit oversold now.  If they do come up with some kind of deal this weekend there should be some room on the upside to celebrate it.  If they don't, then I guess we will see how the market reacts.  I am  not even going to try to predict what happens on Monday, LOL. 

I have thought the new high data on StockCharts.com has been screwed up for a while.  I recently have compared it to some other sources on a daily basis and indeed it does seem to be way high.  I looked into TradeStation symbols to see if they had the data.  They do and it looks more reasonable.  I created a chart for the blog with both the highs and lows on it versus SPY and there are some interesting things.  Here is a look at the chart.  I will be talking about it periodically when it shows us something interesting.

Notice that the Nov. pullback saw a much bigger spike in new lows then the spring correction despite the much higher level of the indexes.  This may indicate the market has weakened internally more then it appears. I have never looked at a chart of the two numbers overlaid before.  The data only goes back to the spring of 2010, but it is kind of interesting.  Notice the current decline has brought the lines pretty close together again.

When I was looking for the new high/low data symbols I found symbols for the number of stocks above their 10,20, and 50 DMAs.  These turned out to be very interesting data items.  Here is a chart with those symbols versus SPY.  I will be showing it periodically also.

This chart will often show nice divergences at turning points.  For now I want to discuss the bottom panel which is the number of stocks above their 50 DMAs.  The red line marks a point where a pullback can become a more serious correction.  Notice that it dropped below that in the spring before the big decline started.  It also dropped below the line in the Nov. pullback.  The green line marks a point where it becomes likely the worst of the sell of is over and any subsequent pullback should make a higher low.  The data goes back to the spring of 2010, so it is of limited history.  I may have to adjust the lines as we get more data.  However, I think they will be close unless the number of stocks on the exchange changes significantly.  In our current situation, we got a warning sign on the sell off.  We have not gotten an all is clear sign yet.  I have mentioned we did not get the usual sign of strength out of the McClellan oscillator we have been getting from oversold conditions.  Here is another indication of the lack of technical strength of the rally.

We are currently in a very short term oversold condition.  I have the same buy signal tonight I had back in Nov. that I reported in the blog.  I have no idea if it is going to kick in right away or not.  Sometimes the market continues lower first and obviously we have a very uncertain situation.  It just adds to the fuel if the market gets a spark on the upside.

The sub intermediate trend has lost its upward bias now.  It is completely neutral.  When I updated the sector status page I noticed that only 5 of the 16 sector ETF's are above their weekly 18 SMAs.  The weakness in the market is pretty broad based.  There were only 3 weekly charts that are still green.  This market can get into trouble pretty easily from what I can see.


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