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Friday, November 1, 2013

Daily update 11/1

Odd day.  Here is the daily SPX chart.

SPX closed up 5 points, but breadth was negative.  QQQ and IWM even closed down on the day.  That seems like risk off.  There might have been some money moving to more defensive stocks.  The consumer staple ETF XLP was up and so were utilities.  Lets zoom in to the SPY 60 minute chart.

SPY now has a down trend line with three points of contact.  I put in a parallel line at the lows for a possible trend channel.  I also added a line connecting the lows we have.  If the market turns down again we will have to see if it reacts to either of those lines.  The volume pattern shows a couple of big green bars.  This was the first of the month and statistically that is one of the most bullish days of the month.  Not surprising we closed higher.  SPY closed above the 18 SMA, but has not confirmed an upside break yet.

The last two days have done some down side testing and found enough buyers to bounce from the lows.  However, the bounces have not been able to stay above the hourly 18 SMA yet.  The breadth has deteriorated at the same time.  Here is a look at the current breadth chart.

Both the McClellan oscillator and the 10 DMA breadth lines are now negative.  The number of new highs dropped down to 103 today.  That was less then yesterday's 133 and today was an up day.   The internals would seem to indicate the market may be weaker then it appears.  Lets take a peak at the weekly chart.

Last weeks blue bar was followed by a doji bar this week.  That shows indecision in an extended market.  Breaking this week's low should usher in more selling.  The bulls need to get the market back to new highs.  A confirmed break of the hourly 18 SMA would be a good sign the bulls may be taking charge again.  Lets see what the monthly chart looks like.

SPX ended Oct. above the upper channel trend line.  Breaking above a long term sloped trend line like that often is a sign of a blow off move and can be the end of the trend.  I seriously doubt this is a sign of acceleration.  If the market continues higher I would expect a creep up the upper side of the line.  Closing back below that line most likely indicates a move back to the lower line.

Chart practice has been updated with JOY the stock tonight.

The market and sector status pages have been updated.

Have a great weekend all,

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