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Friday, November 8, 2013

Daily update 11/8

I expected a bounce today, but not that big, LOL.  Here is the daily SPX chart.

This is the third close above 1770.  The highest close was back in Oct.  Did today undo the damage from yesterday?  Personally I don't think so.  Breadth at the end of the day was 56% positive.  That is amazingly low for such a big move up.  It indicates very few stocks were leading the charge today.  The number of stocks above their 200 MAs actually dropped.  There were 115 new  highs and 55 new lows.  That is the weakest number of new highs and the most new lows while closing above 1770.  The internal strength is not there to give the market an all clear.  Lets look at the SPY 60 minute chart.

As you can see SPY completely crossed the channel and closed at the highs.  This chart shows some big green volume bars today.  This is a pretty mixed pattern though.  Lets look at the 195 minute chart.

On this time frame the volume pattern looks more like distribution since 10/30.  It looks like the bears might have a slight edge.

The internals definitely did not show the same strength that price did today.  I believe the push up started with traders buying index positions because of the short term over sold price.  There was no panic selling indicated yesterday so money managers probably were not interested in selling into weakness.  The weak internals all day kept the money managers on the sideline due to lack of strength to sell into.  That allowed traders to just keep on pushing price higher.  Now that price is back to the highs I suspect sellers will emerge again on Monday.  I am not sure exactly what price on the upside means we are going higher.  A close over 1775 is a must, but I am not sure that really means all clear.  It might need to be 1780 or so.  If we close down again on Monday then I think the pullback will be started for real.  I still want to see new highs under 90 though.

Chart practice has been updated with CCI the stock tonight.

The market and sector status pages have also 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.