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Trend table status

Trend

SP-500

R2000

COMPX

Primary

? 3/31/20

?- 3/31/20

? 3/31/20

Intermediate

Dn 4/3/20

Dn 3/20/20

?- 3/20/20

Sub-Intermediate

?- 3/26/20

?- 3/26/20

?- 3/25/20

Short term

? 3/26/20

? 4/1/20

? 3/24/20


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Friday, August 30, 2013

Daily update 8/30

Day four below the 100 SMA.  Here is the daily SPX chart.


SPX got within one point of the 8/28 low and staged a miraculous recovery into the close.  The bulls are clearly defending the lows.  What is missing is rally chasers.  Every bounce just ends up fizzling out.  We are still in the range of the last two days so the market has not made a decision whether to bounce or break down from here.  I would think we will find out early next week.  I saw several traders on TV mention they are watching that 8/28 low for SPX of 1627.  I suspect there are quite a few stops just below there.  Should we end up breaking down I think the market will accelerate towards to the 200 SMA.  Lets take a look at the weekly SPX chart for a change.


The weekly chart closed below the 18 SMA for the first time since last Nov.  With the exception of the week of the flash crash SPX has continued down the next week after a close below the 18 every time in this bull market.  The flash crash was an unusual event and you might recall there was a big news announcement out of Europe about some plan to save Greece.  Even though the market bounced the week after that cross it then rolled over and went quite a bit lower.  Unless there is a great news event next week the odds should be for more down side.

Have a great weekend all.

Bob

Thursday, August 29, 2013

Daily update 8/29

Another try by the bulls to defend the 100 SMA, but at the end of the day SPX was back below it.  Here is the daily chart.


SPX also closed below the last swing low again.  The bulls came out on a buying spree this morning, but again the market found its high and ground its way lower in the afternoon.  This is now day three below the 100 SMA.  Here is a look at the 60 minute SPY chart.



SPY tested the high of the recent big gap down day marked by the red line.  It found resistance there and moved down in the afternoon.  The last two days look a lot like an ABC correction pattern.  If that is the case then the pattern is complete and we should have started a new leg down this afternoon.  Today's high and yesterday's low should be important price points.  If the bulls can take out today's high they could have a successful test of the 100 SMA.  If we break yesterday's low instead then we should be starting a leg down that is likely to carry to the 200 SMA. 

The last two days clearly found resistance in the afternoon after morning rallies.  That would seem to indicate this is likely a consolidation on the way to lower prices.

Bob

Wednesday, August 28, 2013

Daily update 8/28

We got the high TRIN bounce mentioned yesterday as a possibility.  However, it was pretty feeble.  SPX ran up to the 1639 resistance area and found enough sellers to stop the bounce.  It rolled over and was headed down into the close.  Here is the daily SPX chart.


SPX ended the day below the 100 SMA for the second day in a row.  We still need a close below today's low to confirm the break of that MA.  Without that confirmation there is still the chance of a bounce from this MA.  If SPX can close back above the last swing low of 1639 the bulls might get emboldened.  That would form a potential short term double bottom.  If we continue down from here the odds should favor a trip to the 200 SMA.  That is right in the vicinity of the June low.  There might be some support from the round 1600 number.  However, I don't see anything in the chart to suggest that will be strong.  We smashed right through it back in June.

Tomorrow might tell us whether we are going to bounce from the 100 SMA or break down and head to the 200.  Breaking the 100 sometimes causes an acceleration down.  Who will show up, the bulls or the bears? 


Chart practice has been updated with WYNN the stock today.
http://traderbob58-chart-practice.blogspot.com/

Bob

Tuesday, August 27, 2013

Daily update 8/27

Down it was.  That was a very abbreviated bounce.  Here is the daily SPX chart.


SPX closed below the last swing low.  Price appears to have been rejected at the 50 SMA.  It looks like a test of the June low is likely.  There was a pretty good pick up in volume.  The TRIN closed pretty high which will often cause a bounce the next morning.  I would expect the recent swing low of 1639 to be resistance now if we do get a bounce.  SPX would need to get back above the 50 SMA and demonstrate that it can stay there to get bullish again. There is still a chance we are making low and the market just needed one more push down.  We are in the vicinity of the 100 SMA again.  I don't see anything at the moment to make me think that is the case.  We will just have to see if the bulls mount a serious charge or not.  It seems more likely to me that we are headed for the 200 SMA.

Bob

Monday, August 26, 2013

Daily update for 8/26

This is a bit confusing.  The market sold off pretty fast and hard late in the day.  Here is the daily SPX chart.


SPX closed back below the 50 SMA.  It was still above yesterday's low and above the 6 SMA.  There was a lot of volume on the sell off like it was news generated.  I don't know if it was or not.  Overall volume was light today.  Here is the SPY 60 minute chart.


SPY found support right at the hourly 50 SMA.  It held that low for the entire last 30 minutes of trading.  Do the bulls come back and retake the daily 50 on SPX or do the bears take control and break SPY down below the hourly 50?  I think we will find out pretty early in the morning. 

If that is all the bounce the bulls can muster this market is in big trouble.  If it follows through tomorrow on the downside it seems unlikely the recent lows will hold.  We worked off the oversold condition.  A break down would be a good sign the 8/15 big gap down was really a break away gap.  With the intermediate trend down already the market could head to the 200 SMA pretty quickly.  If the bulls show up the target is still the daily 18 SMA.

Chart practice has been updated with MNST the stock today.
http://traderbob58-chart-practice.blogspot.com/

Bob

Friday, August 23, 2013

Daily update 8/23

Wow, finally.  Steve Balmer is retiring as CEO of MSFT.  What a great day for Windows users all over the world.  We finally have hope that maybe, just maybe they will find somebody good to run the company.  I spent about 10 minutes with Balmer in the 80s while I was at IBM.  He was demonstrating that new fangled excel program.  I left the conversation thinking he was an idiot.  Imagine my shock as he rose through the ranks at MSFT and became CEO.  I told my wife there goes the company.  Gee, I guess I was right on that one, LOL.  Here is the daily SPX chart.



SPX closed above the 50 SMA.  Are we on the way to the 18 SMA?   I updated the chart with green arrows for the last two buy signals.  As you can see the reaction was totally different this time.  The buy signal has a technical exit which fired today.  The buy signal triggered with SPX closing at 1661 and the exit signal fired with SPX closing at 1663.  With the exception of the 2011 crash this is the worst performance of the signal in this entire bull market.  We are still well below the high of the signal day which is rare.  The bulls are very tentative here.  Here is the SPY 60 minute chart.


The bears defended the red line on the SPY chart this morning as it gapped over it, but traded back below.  However, buyers stepped in and SPY managed to close above it on an hourly basis.  The market just trudged higher the rest of the day.  I put in another resistance line at the high of the big gap down bar.  The low of that bar was resistance that held the market in check for days I suspect the top of that bar will be even stronger.  Here is the current breadth chart.


The 10 DMA breadth lines are still negatively crossed.  The McClellan oscillator made it up to near zero today.  With my buy signal exit triggered and breadth in neutral condition I will not hesitate to short if this market turns back down again.  The current upside target is the SPX 18 DMA.  If we close below a prior day's low before we get there it may be a roll over. 

I have talked about how this market high was the weakest internally in this entire bull market.  The poor performance of this oversold buy signal is another sign of market weakness.  This is only the second time the market did not rally the next day after a signal in this bull market.  The other time was the 2011 crash.  My gut feeling is that the bull market is over and we are now starting the bear.  We will have to get much lower to confirm that of course.  I am absolutely positive we are in the most serious correction we have seen since 2011. 

Chart practice has been updated with FFIV the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Have a great weekend,
Bob

Thursday, August 22, 2013

Daily update 8/22

Funny how the NASDAQ exchange suddenly stopped trading when AAPL fell below 500.  Also kind of funny that Carl Icahn tweets about his dinner with AAPL CEO Tim Cook while the market was halted which caused AAPL to trade back above 500 after reopening.  I am sure that was just an odd coincidence, LOL.
The bulls showed up again.   Here is the daily SPX chart.


SPX touched the 50 SMA today, but failed to close above it.  The breadth was extremely strong at 82% positive.  The volume was extremely light. However, the NASDAQ outage of several hours might have affected the NYSE volume as well.  Here is a look at the SPY 60 minute chart.


The red resistance line is at the low of the bar marked by the yellow arrow.  Notice the bulls came in and supported the market for several bars there.  The bar marked with the blue arrow was a break down bar and the red line has been resistance ever since.  Today came in contact with the 50 SMA on this time frame also.  An hourly break out above that line could be an indication a true bounce is underway.  I don't know what the odds of that happening are.  This market has not closed up two days in a row since we started down from the all time high.  That in itself is probably an odd thing to happen.  It does show an urgency to sell into strength.  Has that urgency passed or will the bears be back tomorrow?  Here is a peak at the current breadth chart.


The McClellan oscillator has gotten above the -100 line so it is now in neutral territory.  The 10 DMA breadth lines are still very negatively cross.  The market has worked off the deep oversold breadth readings while trading sideways.  That could mean the market is consolidating to move lower.  A lot of the time it will get up closer to 0 or maybe cross positive before resuming the down move.  If tomorrow is up and SPX closes above the 50 SMA we might be on the way up to the 18 SMA area as a dead cat bounce.  The very slow response to my over sold buy signal indicates to me that bulls are very tentative.  I don't believe this is making a lasting low yet.  I suspect the number of people that believe the taper will start in Sept. is bigger then the number of people that don't believe that. 

Because breadth has returned to neutral if the bears strike again and close SPX below yesterday's low it could keep going down a few days.  Every up day has been met with some selling the next day.  I just don't see anything tonight that says there is high odds that will not be the case tomorrow.  I will be watching the SPX 50 DMA and the red line on the SPY chart in the morning.

Bob

Wednesday, August 21, 2013

Daily update 8/21

Somebody must have put the bulls back in the barn.  The bulls tried to defend Monday's low multiple times today.  However, at the end of the day the market sold back down through it.  That action seems likely to continue tomorrow morning.  I mentioned the other day that when my over sold buy signal fails to trigger a bounce within two days it usually means the market is bothered by something.  I would say the market is very bothered by the thought of taper.  Here is the daily SPX chart.


SPX closed back below the lower Bollinger band again.  Are we starting an accelerated move down?  I have not sensed any fear entering in yet.  If we keep going down that will happen at some point, but where.  My support lines are all below the 200 SMA.  We have the 100 SMA and the June low above there and that is about it.  The volume has not been particularly heavy on the way down which suggests a lack of buyers more then heavy selling.  That is not good if you are looking for a climax low.

What could motivate buyers now?  Earnings growth is slowing.  The only real reason people were buying was QE.  With the threat of that being pulled back what is the incentive?  I think it is clear people are more interested in taking profits.

Until SPX gets back inside the lower Bollinger band it can accelerate down.  Do not buy falling knives here.  Everybody else is selling rallies.  Do not fight them until we have a clear sign it is time to do so.  Big down moves have happened in the past when my over sold buy signal fails to spark at least a 2-3 day bounce.  The exit may be about to get crowded.  These things can be hard to predict.  However, I can predict that buying too early can be very painful.

Chart practice has been updated with BIDU the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Bob

Tuesday, August 20, 2013

Daily update 8/20

Inside day on the QQQs and SPX.  The Russell2000 and the transports traded above yesterday's high.  This leaves us in undecided territory on whether to bounce or not.  Here is the daily SPX chart.


SPX closed back inside the lower Bollinger band today.  However, it found resistance at yesterday's high and ended up closing below the 50 SMA again.   On Friday we closed below the 50 SMA and Monday we closed below Friday's low.  That technically is a break of the 50.  Today it traded slightly above the MA, but was turned back.  Breadth was strong at 74% positive and yet SPX was unable to stay above the 50.  Lets look at the SPY 60 minute chart.


SPY got above the 18 SMA for the first time since the big gap down.  However, once there it never had a bar close above the high of the bar that closed above the MA.  Therefore it never technically broke it to the upside.  There was a big green volume bar this morning as the market rallied early.  The bulls are trying to make a stand.  I don't know whether they are going to be successful or not.  A break of yesterday's low or today's high could signal the direction of the next move.

The fact that it took three days after my oversold buy signal before we got a positive day means the market is inherently weaker then it has been over the last year.  All other buy signals in that time frame have rallied the next day.  Since we technically broke the 50 SMA caution is advised until we get a close back above it.
Even though we are over sold the bulls do not seem to be very vigorous.   Will they show up and try again tomorrow or will they fold? 

Bob

Monday, August 19, 2013

Daily update 8/19

I believe the appropriate expression might be uh oh.  Here is the daily SPX chart.


No sign of bulls for the short term oversold buy signal yet.  This is the third day in a row we closed lower with blue price bars indicating we are below the lower Bollinger band.  I had to go back to the flash crash in 2010 to find an instance where that happened coming in the first leg down from bull market highs.  In that instance the third day was the flash crash.  This is only the second time in this bull market SPX has done this.
Obviously the bulls have lost their mojo for the time being.  I would expect any bounce now to be of the dead cat variety and the market retest whatever low the bounce comes from.  We ended the day at the weekly 18 SMA which could provide support for a bounce.  Will the bulls show up or not? 

I have talked about the technical divergences at the recent top.  Check out this chart of the stocks versus their MAs.


The bottom panel is the number of stocks above their 50 SMA.  This is the first time SPX made a new bull market high where that blue line never crossed the horizontal green line.  Here is the McClellan summation index.


The light blue line is SPX.  On the recent rally to new all time highs this index maxed out 569.  As you can see in the chart all other bull market peaks were over 2000.  This is a major divergence that has not happened since the 2007 top.  Here is a chart covering the last two times we made new bull market highs under 1000 on this index.


It happened twice in the last bull market.  I circled the areas in 2006 and 2007.  The sell off in 2006 was only about 8%, but the 2007 instance was the end of the bull market.  What will it be this time?

What we do know is the technical condition at the recent high is different then any other high in this bull market.  What we don't know yet is what does it mean.  Is it another garden variety correction or something longer lasting?  There is a very real possibility this is the end of this bull market, but it is too soon to tell.  I have seen a lot of market pundits rationalizing all the new lows as being related to the sell off in bonds.  I have not doubt that is the case.  However, I don't know if we can just write it off as having no serious meaning.  There are way more new lows then we should be having this close to the highs.  Is it really safe just to ignore it given the weak technical condition?  Back in the spring volatility erupted in gold and currency markets.  It then spread to global bonds and emerging market stocks.  Is it now starting to spread to developed stock markets?  Stay tuned.

Chart practice has been updated with JOY the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Bob

Friday, August 16, 2013

Daily update 8/16

A little lower still.  This is the first over sold buy signal in over a year that did not mark the closing low.  Usually this signal will bounce within two days.  That means the bounce should start on Monday.  Warning.  If this market continues down next week it is likely to do so very violently.  This buy signal is a very short term oversold condition.  If the market does not bounce from that condition it usually means something is seriously bothering it.  The last time it failed to bounce was 7/29/2011.  The market really fell out of bed after that.  That was the debt ceiling debate so it was pretty clear what was bothering the market then.  If we fall out of bed here the most likely cause is probably the crashing bond market.  If that happens that could mean that yesterday's big gap down was a break away gap and is likely to go unfilled for a while.  We had a rather flat trading range at the highs so that is a price pattern conducive to a break away gap.  The jury is still out on that so next week is important.  Here is the daily SPX chart.


SPX is sitting right around the 50 SMA.  Will the bulls rally the troops for a bounce?  It started a bounce late in the day, but it failed to get any traction and sold off a bit going into the close.  Here is a look at the SPY 60 minute chart.


There was a rally bar late in the day on an increase in volume.  Even though the last bar did not follow through there is some potential for this pattern to be a bottom.  It needs follow through early on Monday.  It is still ambiguous at this point.

In The dilemma of major tops and bottoms I wrote "This bull market kicked off with a big gap up that was never filled.  Will it end with big gap down that goes unfilled?".  If yesterday's big gap turns out to be a break away gap it could have serious implications.  There are a lot of things consistent with the 2000 and 2007 tops.  We should know more next week.

Chart practice has been updated with NSC the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Have a great weekend all,
Bob

Thursday, August 15, 2013

Daily update 8/15

Break down on volume.  Here is the daily SPX chart.


The trend change to down yesterday was confirmed today.  SPX also broke down below the lower blue channel line.  That was such a big gap this morning it can be seen in the daily bar.  Most of the time you don't see the gap in SPX.  SPX has a blue bar indicating it closed below the lower Bollinger band and is extended.  Lets look at the SPY 60 minute chart.
 

SPY essentially found the low of the day in the first hour.  It retested that low in the afternoon but held.  That is not exactly panic selling.  The TRIN was extremely low all day and closed at .55.  That would also suggest there was a lack of panic. Finding the low early in the day like that kind of looks like a possible low.

Interestingly I got my oversold buy signal today.  Long time readers might recall I got that buy signal on the day of the low in the pullbacks in Nov., Dec., and just recently in June.  Is it going to mark a low again?  This seems a little interesting.  We broke down from a narrow range multi week trading range only to generate a buy signal.  Was today just a stop running exercise before going higher or truly a break down?  If we bounce will we rally up to the lower blue channel line and kiss it good bye?  Ever since closing above the May high (1687) in late July the bulls kept defending that level.  I believe that will provide pretty stiff resistance.  My best guess is that we will bounce in the near future up to the 1687 area and roll over again.  If we continue down tomorrow the the daily 50 SMA is just a little bit lower.

Bob


Wednesday, August 14, 2013

Daily update 8/14

We have a development finally.  Here is the daily SPX chart.


SPX closed below the May high (1687) and there was a trend flip to down.  However, it ended the day right at the lower blue trend channel line.  The trend flip will sometimes come right on a low.  To truly change the trend it needs confirmation of a lower close before the trend flips back up.  There were 231 new lows versus 99 new highs today.  We are within spitting distance of all time highs it is very abnormal to have this many new lows.  Somebody is selling a lot more then just normal profit taking.  The question you should be asking yourself is who is doing it.  Is it smart money or dumb money?  I can tell you there are a lot of similarities to 2000 and 2007.  Both those tops saw a turn down in margin debt and a double top formation.  There were also big divergences in market internals like the number of stocks above their 200 MAs and the McClellan summation index.  We have very similar divergences today as well.  The time between the highs was shorter in 2007 then 2000 and the time between the current peaks is shorter yet.  The main difference is that in the current situation SPX did not visit the 200 DMA in between the peaks.  That may mean that if we do sell off here we visit the 200 and retest the high in some fashion.  I don't know that we can count on that though.

Should the market follow through on the down side the July low of 1676 is extremely important.  I am sure there are a lot of stops lurking around a little under there.  Should we break that the market is likely to accelerate down.  On the upside SPY needs to demonstrate that it can stay above its hourly 50 SMA.  Every time it sticks its head up there it comes to a screeching halt.  That may be starting to put a damper on dip buyers as they seemed to be running out of gas.

Chart practice has been updated with EBAY the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Bob


Tuesday, August 13, 2013

Daily update 8/13

One of these days the market will decide.  Here is the daily SPX chart.


SPX closed fractionally above the 18 SMA.  It has what looks like a possible short term triple bottom over the last several days.  We clearly have dip buyers and rally sellers.  I guess the dip buyers are people that believe there will be no FED taper in Sept. while the sellers believe there will be.  Who will be right and who has the bigger hammer?  Lets look at the 60 minute SPY chart.


There were a few big green volume bars in late July I circled before the big gap up.  I fell asleep at the wheel and failed to notice that so I did not mention it.  So far that has not been the case lately.  The one big green volume bar we had was a big gap up that got sold immediately.  The bar closed above the prior days close so the volume bar was green, but I would not call that accumulation.  The last two times SPY got above the 50 SMA intraday it came to a stop. 

The volume suggests the bears might have the bigger hammer.  However, they have not been willing or able to break the market down.  It could be they are only looking to sell into strength which allows the dip buyers to buoy the market.  Are the bulls going to try to continue today's bounce tomorrow or will the bears strike back again?  Beats me.

Bob

Monday, August 12, 2013

Daily update 8/12

Ho hum.  The dip buyers are still active, but so far the rally sellers have been stronger then the rally chasers.  Here is the daily SPX chart.


SPX is approaching the lower channel blue line.  We closed for a second day in a row below the 18 SMA, but not below Friday's low.  That means it is an unconfirmed break.  It also closed above the May high (1687) yet again.  Here is what we do know.  The bulls are defending that May high.  However, bounces are not getting any traction as we have made lower highs and lows three days in a row.  This is the first day that the high was also below the 18 SMA.  It would seem there will be a decision here pretty soon.  If we keep making lower highs and lows it will eventually break down and head to the 50 SMA.  As long as we stay above the May high the bulls can still seize the moment.  Is it going to take some kind of news event to get us out of the narrow three week range?


Chart practice has been updated with GS the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Bob

Friday, August 9, 2013

Daily update 8/9

SPX is back below the daily 18 SMA.  Here is the chart.


Three days in a row SPX tested down into the area of the May high (1687) and bounced.  However, none of the bounces got any traction.  Price has a red bar and a second close below the 18 SMA in three days.  I think the odds are tilting toward the bears now.  If we close below today's low it would confirm the break of the 18 SMA.  Often that means a trip to the 50 SMA.  A close below the May high would open the door for the bigger picture potential double top to play out.  A close below the last swing low (1676) would confirm the short term double top pattern and greatly increase the odds of the bigger picture double top.

I think it is generally agreed that the majority of market participants believe that QE has pumped the market up.  Without it we would likely not be up at these levels.  If that is truly the case then won't it be likely that if the majority of market participants believe that QE will be tapered they are likely to take some money off the table.  I believe a taper is coming to a FED near you and probably in Sept.  The recent FED speeches have all talked about taper.  I also don't believe it has anything to do with the economy.  I have seen articles about problems with treasuries for collateral and issues in the Repo market.  With the reduced funding requirements caused by the tax hikes and spending cuts the FED has become an even bigger percentage buyer of what is out there.  Apparently it is starting to cause problems in the markets.  Obviously the FED is not going to admit this.  Imagine the chaos that would cause.  However, I heard this discussed on Bloomberg TV today so it appears to be a real problem.  I believe this is the real reason why rallies are being sold. 

Next week is option expiration.  That week has a strong upside bias, but when it is down it can be down big.  I think last Nov. was the last time we had a big down option week.  It may be time for another one if we head down early next week.  We have been in this same area for nearly a month.  In that time a lot of people have been buying at elevated prices.  I am sure there are some weak hands in there that will bail if they get under water. 

Chart practice has been updated with ACN the stock today.
http://traderbob58-chart-practice.blogspot.com/

Have a great weekend all.

Bob

Thursday, August 8, 2013

Daily update 8/8

Lazy rally.  Here is the daily SPX chart.


SPX bounced off the 18 SMA, but did not manage to close above the 6 SMA.  Breadth was 61% positive which is not very exciting after a three day pullback.  New highs were 145 versus 83 new lows.  Bulls would have liked to have seen new lows drop below 50.  The futures gapped up and promptly sold off only to rally again mid day.  At the end of the day they were lower then the open.  That made a hanging man candle on SPY.  That should be bearish of we break today's low.  Here is the SPY 60 minute chart.


SPY actually closed above the 50 SMA for three bars today.  However, it never closed above the first bar's high to confirm an upside break of the MA.  The last candle sold off back below it.  That leaves us in the middle of nowhere for tomorrow.  Today was not strong enough to say it was a rally kick off.  Even though SPY closed back below the 50 SMA it still needs confirmation that a down move is resuming.  A break of today's high should test the all time high.  A break of today's low probably targets the daily 50 SMA.

Bob



Wednesday, August 7, 2013

Daily update 8/7

A little more down today.  Here is the daily SPX chart.


SPX closed below the July high, but above the May intraday high of 1687.  The most striking thing today was that new lows were 165 versus new highs of only 58.  So new lows were almost triple the new highs.  Considering we closed below the 18 SMA for the first time since crossing above it the first week of July that seems very excessive.  Since we are still above the May high and just barely closed under the 18 SMA it would be normal for the bulls to mount an attack tomorrow.   If we do get a bounce we will have to see what the quality of it is.  I suspect it would be a bounce to sell.  If we continue down tomorrow I think it would be the first time we will have had four down days in a row all year. 

With the negative breadth readings at all time highs and this many new lows so soon I think the bears are in control.  Be careful about getting too excited about a bounce here.  I suspect the bears will be back at some point when they get higher prices to sell into.  Especially if new highs stay below the number of new lows.

Check out the TLT chart.


TLT rallied again today and is back above the 7/5 spike down low.  It spent a few days probing lower, but did not collapse.  This looks like a pretty good attempt at making a double bottom here.  It still needs to follow through some more.  I think a rally in bonds will be negative for stocks, but we will have to wait and see.  First lets see if TLT really has bottomed.

Bob

Tuesday, August 6, 2013

Daily update 8/6

The bears came out to play this morning.  Here is the daily SPX chart.


SPX closed below the 1700 round number potential support.  However, it ended the day at the top of the July highs.  That was resistance will it now be support?  Here is a look at the SPY 60 minute chart.


After the initial sell off in the morning the bulls attempted a bounce off the July highs.  However, that bounce did not gather any follow through.  The bulls were able to hold SPY just above the 50 SMA the rest of the day.  There were 170 new lows and only 114 new highs.  This is an extremely high number of new lows this close to the all time highs.  This looks like a lack of desire to buy.  Will that all change tomorrow or will the bears come out to play again?  If there is down side follow through tomorrow a short term top is likely in place.  The real key support is the last swing low of 1676.  If that gets broken we are likely headed to the daily 200 SMA. 

There are an awful lot of similarities with this potential double top to the tops in 2007 and 2000.  The sentiment picture feels much more like 2000.  Everybody today is convinced the market can only go up because of QE.  Back then it was the new paradigm.  Final tops in a bull market and bottoms in a bear market are always pretty tough to nail down.  This is a really good candidate for the final high though.  Buyer beware.

Bob

Monday, August 5, 2013

Daily update 8/5

All aboard.  That is what this market looks like to me.  I believe everybody is in that wants in.  I have already mentioned the negative breadth indicators.  In addition to that there is another sign of weakness.  The last four days (including the big gap up thrust to new highs) have seen more the 50 new lows.  Today we actually had 109.  That should not happen with SPX at all time highs.  Here is the daily chart.


The dip buyers were out this morning.  SPX tested yesterday's high but found no rally chasers up there.  I am not surprised by that, LOL.  This is one very tired market.  In fact, this is the weakest the market has been at the highs in this entire bull market.  With negative breadth indicators and elevated new lows it is pretty hard for me to imagine this market flying higher.  This still looks like a retest of the May high that is doomed to failure.  I guess we will see.  A close below 1700 would be a warning sign. 

Chart practice has been updated with POT the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Bob

Friday, August 2, 2013

Daily update 8/2

Rally chasers = profit takers.  Today was a draw.  Here is the daily SPX chart.


I sound like a broken record, but SPX stopped at the lower red channel line yet again.  At least for bulls it is sloping upward.  I don't think today tells us a lot.  A lot of tops have a thrust and a narrow range bar, but a lot of times that same pattern continues on.  There are still all kinds of divergences in the market internals.    A close back below 1700 would be a warning sign.  Based on the charts I showed last night with new highs on negative breadth there probably is at least 50/50 odds of this being a top.  With the many divergences in the internals it is possible the odds for a top are even higher then that.  To stay up here it will require rally chasers to buy the highs.  We will see if they show up.

TLT is going crazy, LOL.  Up and down.  Here is the chart.


After rallying nicely from a test of the 7/5 low it tanked again the next day and closed at new lows.  However, today it gapped up and rallied more through the day and is back above that 7/5 low again.  This still looks like it is trying to bottom to me.  Will it succeed?  Will there be ramifications for stocks if it does?
The stock market accelerated up about the time TLT topped last July.  I have been thinking that if it does make a bottom there could be some rotation out of stocks and into bonds.  That idea comes from the old days when there used to be rotation between those asset classes by Wall Street firms.  Today we have the so called risk on and risk off trade.  I am not exactly sure how that relates the two asset classes anymore.  Just in case TLT bottoms and there is an affect on stocks I will keep an eye on it.  Upside follow through next week would help make the bottom look a lot more possible.

Chart practice has been updated with APOL the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Have a great weekend all.
Bob

Thursday, August 1, 2013

Daily update 8/1

SPX over 1700.  Here is the daily chart.


The funny thing is it stopped right at the under side of the lower red channel line again.  What do you think happens now?  Today was a very rare day.  Check out the current breadth chart.


Both the McClellan oscillator and the 10 DMA breadth lines are still negative.  Today ended with only 61% NYSE stocks positive after starting out about 80%.  That is a very poor thrust day.  They usually are in the 67% and above category when they are the start of big move.  Making a new bull market high with the indicators in this chart negative is extremely rare.  Last April it almost happened as the green line was 1 point above the red line just before that spring's sell off.  The last time it actually happened was in July 2007.  There were two occurrences that year.  Here is the chart with yellow arrows marking the days.


Going back in time the next occurrence was in 1999.  Here is the chart.


Needless to say it is not a very good thrust day.  In the last 14 years there is no instance of this kind of day leading to a blast higher for weeks on end.  It usually chops around or sells off.  History shows many important turning points in late July and early Aug.  If this does turn out to be a top the sell off could be a dozy. 

Now we wait and see what happens.  Will SPX be able to stay above 1700?  Round numbers are often a place people decide to take profits.  The way the breadth deteriorated today it was clear some people were doing just that.  It is a question of how many rally chasers there are relative to profit takers.  I don't know how to determine that without seeing what happens.

Bob

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