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Wednesday, November 6, 2013

Daily update 11/6

Retest of key reversal day high with a mixed market.  Here is the daily SPX chart.

Leading the charge on the upside were utilities and consumer staples.  The weaker sectors were the QQQ, IWM and IYT.  This was clearly a move from more risky assets to defensive issues.  The futures ended the day right near where they started yet again on a gap up.  That indicates that rally chasers are missing in action.  Check out the SPY 15 minute chart.

SPY broke above the red line (.786 retrace line) and immediately popped up to test the key reversal day high.  You had to be really fast to catch that one, LOL.  At that retest the sellers stepped in and knocked it back down.  The rest of the day was a stalemate.

The breadth started out the day strong but ended barely positive.  There were 166 new highs which is  better then the last few days, but still well below 200.   Both breadth indicators are still negative.  Here is a look at the number of stocks above their 200 DMAs.

The pullback in May really whacked this chart.  Despite the higher highs over the last few months it has never recovered.  It is now diverging from price over the last few days.  Yesterday was quite a whack that was only partially recovered today.

What happens now?  Here is what we know.  SPY retested its key reversal day high.  Market internals are weak.  There was a move from risk assets to more defensive stocks.  Gee, that kind of looks like a top to me.  Buyer beware.  A close below today's low could set a pullback in motion.

Chart practice has been updated with AN the stock tonight.


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