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Thursday, June 13, 2013

Daily update 6/13

That was interesting, but what does it mean.  Here is the daily SPX chart.

SPX bounced off the 50 SMA and lower blue channel line on strong breadth.  However, it closed just below the lower red channel line.  Will it rally further tomorrow or turn back?  If it turns back then this was probably a kiss the channel good bye move.  The trend bias is still down and the way price action is unfolding it is becoming a bit harder to turn it up.  Lets zoom in to the SPY 60 minute chart.

I put in a trend line connecting the top and the last major high.  Price poked through that line a bit today, but closed right on it.  Will price react negatively off that tomorrow or push through?  How do you predict what this market will do, LOL.

There were 342 new lows vs 66 new highs today.  That seems like an awful lot of new lows for an up day.  A lot of those happened early this morning, but the number kept climbing all day.  I see some people saying we made an important low.  I don't think it is safe to say that yet.  I would want to see the new lows drop under 50 first.  We also need to turn the daily trend bias back up and confirm it with a higher close.  It is also hard for me to consider a low without getting my extreme over sold buy signal.  I have known about that signal since 2004 and I have yet to see a correction end without getting it at least once.  With new lows so high we are definitely in a correction and not a simple pullback.  This bounce relieved over sold pressure.  If we head down again and break today's low I don't think the prior swing low will hold.  If we had tested down there instead of the bounce we might have created an oversold enough condition for it to hold.

With SPX at the lower channel trend line and SPY at a possible down trend line the ball is in the bears court.  Will they show up again or have the bulls won?


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