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Friday, March 1, 2013

Daily update 3/1

There was some follow through selling this morning, but the market did not like my idea of closing below the 18 SMA.  I saw somebody mention that every Friday this year has been positive.  I guess that pattern was not ready to break yet as we did have a positive close.  Here is the daily SPX chart.

SPX did not close above the 2/27 high.  That was the day SPX crossed back above the 18 SMA.  Now we have a higher high from yesterday.  SPX has not confirmed the move back above the SMA yet.  Every Monday has been down this year. Will that pattern repeat?  Lets look at the weekly chart.

SPX has closed within a few points of 1515 for five weeks in a row.  It is clearly struggling with the upper trend line.  Two weeks ago it had an extremely narrow price range.  Last week the price range expanded and engulfed the prior week.  This week we have a hanging man with the low having been lower then the low of the prior 4 weeks.  This pattern looks bearish to me, but that could be my current bearish bias talking, LOL.  Lets look at the SPY 195 minute chart.

SPY had another big volume bar this morning.  The count is now bears 4, bulls 2 on the big volume bars.  Like the last big green volume bar, the biggest volume this morning on the 30 min. chart was on a down bar.  I can't be sure the volume is as bullish as it looks.  SPY is still well below the trend channel. 

I heard several traders interviewed (including one today) on TV that still expect a deal in Washington on the sequester.  I have the feeling people are buying the dips because they think there will be a last minute deal just like before.  Before the deal at the end of last year, they spent all week huddled up and at the last minute they were locked away in a room to hammer out a deal.  The president has said the cuts are stupid and there is a better way to do it.  However, when the talk of doing a bill in the Senate to allow the president to make the same dollar cuts anyway he wanted Senate majority leader Reid said no way Jose.  Obviously the democrats want the cuts the way they are.  The republicans also seem to be quite content with the cuts.  I am absolutely positive there will be no deal.  If dip buyers really are buying expecting a deal I think they will be disappointed.  How long before they give up and sell?

The daily SPX chart looks semi positive, the weekly chart looks bearish and the SPY 195 minute chart is showing more distribution then accumulation.  After 5 weeks in the same area I think it is time for resolution next week.  I expect that will be down, I guess we will see.

Chart practice has been updated with AAPL the stock today.


1 comment:

Anonymous said...

Hey Bob
Couple of things:
1) if you look at the SSO second half of trading today , you will notice super increased volume, and that made 4 times the avrg volume. Since it didnt break thee yesterday's high, I beleive it topped out. I will be very surpised if it makes new high on Monday. it is definitley signal for upcoming sell off.
2) today there more new highhs then lows.Hiwever SPY didnt break the major high from yesterday niether the 18 MA.
Just because the blood bath didnt start today , it doesnt mean it will not start next week. So we are on the same page.
Im short mostly in the minings, IAG....NAM ....and some financials, that ouldnt brake any new highs today GS....
Just not confident to be long this market .
Keep up the good work .


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