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Thursday, April 11, 2013

Daily update 4/11

Despite the new highs in SPX and the Dow it was a mixed day.  Technology was dragged down a bit I suspect by the reports of a big drop in PC shipments.  The transports also ended the day lower.  Here is the SPX daily chart.

SPX is still above the upper Bollinger band.  Volume increased again today, but still is not very high.  Needless to say the volume is not what you would like to see with break outs to new all time highs.  It does not look like a flood of money coming into the market.  For comparison lets look at the volume in late 1982 as the Dow was breaking out to new all time highs.

The volume picked up significantly in Aug. of 82 and stayed high as the Dow broke out and continued higher into 83.  That was the start of a new secular bull market as people stampeded in.  That volume started well before the Dow got back to the old high.  Clearly we have not had any surge in volume.  Will it happen?
I don't see it unless we get some kind of startling good news.  I don't see how we start a new secular bull market without it either.

The market showed a slight crack in the armor today with some indexes ending the day down.  With the market this extended that is not surprising.  Will SPX go back and test the break out or trade sideways?  I think it is too extended to continue up without a pause of some kind.  On any pullback SPX 1576 is a key level.  Watch for support or a break.


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