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Monday, July 1, 2013

Daily update 7/1

Hmm, that was a poor performance by the bulls.  Here is the daily SPX chart.

SPX crossed above the 18 and 50 SMAs this morning, but failed to stay there.  This bounce has had four big gap up days and each day price ends up not far from the open.  Volume also dropped off each day.  The trend indicator turned up today, but will the market follow through tomorrow and confirm it.  The futures got within 1.5 points of a gap fill of the big 6/20 gap down.  This is close enough to consider it filled.  I have to show the daily SPY chart again.

Look at all those doji bars since the low.  The last three have considerable upper tails showing there is resistance in this area.  I have never seen a pattern like that coming off my over sold buy signal.  I don't think there has been much in the way of short covering at all.  They might even be adding to them into the strength.  There is essentially five doji bars in a row.  Coming off an oversold low I am having some trouble understanding how that could be bullish.  I guess we will see.  Here is a look at the SSO 60 minute chart.

SSO crossed above the red line this morning and generated some buying.  However, by the end of the day it was back down below it.  This continues a pattern on this bounce of selling in the afternoon.

We essentially filled the big gap down from 6/20.  SPX was rejected at the 50 SMA after clearly crossing above it this morning.  The bulls fumbled the ball today.  Will the bears pick it up and run or will the bulls be able to get it back tomorrow?  We are still above the hourly 50 SMA, but not really acting all that well. 

There have been some FED speeches that have made it clear the so called taper talk was misinterpreted by the market.  If the market rolls over and sells off again it could be due to something else.  I don't really have any idea what is coming next.  That daily SPY chart is really, really odd coming off an over sold low.  Don't forget we had a rare 90/90 down day.  It is normal to bounce after such a day, but it can also be a sign of further trouble.  The next couple of days are important because the trend indicator on the daily chart turned up.  However, it needs confirmation by closing higher.  If we don't get that and it turns back down we could easily be on the way to the 200 SMA. 


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