Daily update 9/13

I think today is a clue.  There were only 86 new highs and 56 new lows.  That on an up day this close to all times highs in SPX is not good for bulls.  Under 100 on an up day usually only happens when coming off a low or still in a down move.  This many days off the low it shows bulls are losing conviction.  We may still test the Aug. high, but I think the odds of breaking out and running higher are very low.  It will take a major positive news event that inspires the bulls to make that happen.  Maybe if the FED does not announce any tapering of QE next week.  Given the weak market internals now a bad reaction to taper seems likely.  Here is the daily SPX chart.

SPX remains inside the resistance zone.  Today's bounce came on extremely light volume. With a big FED meeting next week low conviction in either direction is not surprising.  Nobody wants to sell in case they do not taper.  Nobody wants to chase price higher in case they do.  Here is a look at the SPY 60 minute chart.

The last two big volume bars are red indicating a bit of distribution.  Not enough to be a red flag yet, but if that continues it is likely the market will reverse from this area.  SPY held on to the important 18 SMA, but so far has failed to launch off of it.  Will it break or launch next week?  Stay tuned.

The breadth on this rally is strong, but the number of new highs is not.  We had more new highs in July with SPX at 1640 then we have now at 1685.  There are a lot less stocks above their 50 and 200 SMAs also.  These are important divergences if the market turns back down.  At the moment this market looks much more like a major top then a market preparing to break out to the upside.  Time will tell.

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

The market and sector status pages have been updated.

Have a great weekend all,

Bob