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Thursday, December 5, 2013

Daily update 12/5

Down for the fifth day in a row.  Here is the daily SPX chart.

SPX closed below the 18 SMA today.  It needs to close below yesterday's low to confirm the break. It is still above the key 1775 level.  What really happened today is clearer on the SPY 60 minute chart.

Today's range stayed inside the price range from the last 2 hours yesterday.  There were several drops below 179, but each time the dip buyers rushed in to buy.  However, each bounce was sold and price ended up back at 179 again where it closed.  None of the bounces ever got up to the 18 SMA today.  That appears to be a pretty weak price pattern so far.

There were 123 new lows against 55 new highs.  The last pullback into the Oct. low never saw new lows spike above 100.  The two prior pullbacks saw new lows over 400.  I guess that begs the question are we going to see a big spike up in new lows before the next bottom forms now that we crossed the 100 threshold?  It certainly adds to the probability that we have more down side to come.

The futures were up slightly before the latest GDP estimate came out at 8:30 and sent the futures down.  Good news was bad news today.  That suggests taper fear was in the air.  The employment report tomorrow can add or subtract to that fear.  I think it is likely we have a big down day if the number comes in strong.  If it is extremely weak (seems unlikely based on what data we have had) then a big up day could be in store. 

The market is acting weak, but we have not broken key support yet.  Maybe the jobs number tomorrow will kick the market into gear one way or the other.  I will be watching 1800 on the upside and 1775 on the down side.


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