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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.


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