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Wednesday, June 5, 2013

Daily update 5/5

Another down day to add confirmation to the trend flip on the daily chart yesterday.  Here is the daily chart.

SPX closed with a blue bar so it is below the lower Bollinger band and is extended.  It stopped about 3 points above the 50 SMA.  I hate it when that happens, LOL.  Now that the trend down is confirmed the market needs to do some extra work to get fully bullish on the daily chart again.  It will need a confirmed trend flip to the upside.  Lets zoom in to the 60 min. SPY chart.

SPY consolidated the last few hours today.  Is that a consolidation to bounce or break down from?  We are really over sold in the short term.  I have some buy signals firing tonight.  However, these are not the most reliable signals.  My favorite over sold signal that fired on the day of the Nov. and Dec. lows has not fired yet.  With the weekly VIX chart showing the 6 MA above the 18 SMA it is highly likely that signal will trigger before the ultimate bottom is reached.  I can't recall the market ever bottoming in that condition without the buy signal triggering.

I don't know what happens tomorrow.  We could start a dead cat bounce.  However, we could just as easily go down to the 50 SMA or a little below first.  There should be resistance in the 1622 area.  The strongest support is around 1597 with the 50 SMA at 1604 possible support. 

Chart practice has been updated with AMT the stock tonight.


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