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Tuesday, June 4, 2013

Daily update 6/4

The string of up Tuesdays comes to an end at 20.  Nothing like a front page article in the USA Today to put an end to a market pattern, LOL.  Here is the daily chart.

SPX held just above Friday's mini crash low.  The bulls are trying to hold the market up here.  However, they have not demonstrated much strength so far.  The trend bias flipped to down today.  This is the third time that has happened this year.  The other two times it was a low as the market rallied the next day and continued up.  The trend flip needs a lower close for confirmation.  That lower red channel line continued to provide support today.  Will it hold long enough to get a bounce?  Lets zoom in to the 60 minute SPY chart.

SPY is trying to hold the 200 SMA on the hourly chart.  There is a potential double bottom.  We saw lots of potential double tops on the way up this year that did not mean anything.  Until the bulls do something with it, it is just potential.  Here is the current breadth chart.

Both the 10 DMA and McClellan oscillator have the most negative readings they have had since last Nov. 

Lately every other day has been a different direction.  Will that pattern continue tomorrow?  The daily chart had a trend flip to down and the breadth chart is showing a short term very over sold condition.  This would be the time and place for the bulls to show up if they have the desire still.  If the bulls show up I would expect a dead cat bounce that fails to make new highs.  It would just relieve the short term over sold condition.  I think a lower close tomorrow will indicate the bears are in full control for now.  If we break the lows of the last two days selling should accelerate again.


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