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Wednesday, July 3, 2013

Daily update 7/3

At least we got something besides a doji bar today.  Here is the daily SPX chart.


SPX closed right at the 18 SMA.  Despite the slight positive close breadth was still 61% negative. This leaves the breadth indicators still deteriorating.  The pattern of buyers in the morning repeated.  Since the market closed early the bears did not really get their usual turn.  Both Asia and Europe were very red today and they will be open tomorrow.  Hard to say what will happen by the time we open on Friday.  Here is a look at the SSO 60 minute chart.



Yet again SSO was above the red line, but failed to close there.  There is a potential head and shoulders top pattern forming.  Will it break the neckline or will the bulls save the day?  A break down should mean a test of the 6/24 low and possibly a trip to the 200 SMA.  A break out over the head should mean SPX will test 1650 and possibly a new all time high.  Until we do one or the other I guess it is buy dips and sell rallies intraday.  Maybe the employment data on Friday will shake us loose from the trading range.

Bob

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