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Tuesday, February 4, 2014

Daily update 2/4

The VIX spike and the high TRIN close did bring out some buyers.  Will it be enough to make a bottom?  Here is the daily SPX chart.

This was the highest volume up day of the year.  That is a good start on making a bottom.  I would prefer to see yesterday's low tested to insure the sellers are exhausted.  If we continue up from here there is a risk we get up to the 100 SMA and roll over again.  With breadth only 65% positive it was not a particularly strong day.  At some point if we are to mount a significant rally we will need to see a much stronger up day.  Lets zoom in to the SPY 60 minute chart.

That big green volume bar this morning is the biggest green volume bar all year.  The same thing happened on the 195 and 130 minute charts.  That is the first sign of accumulation all year.  Will that continue?

We had good volume today and SPX closed back above the Nov. low.  The bulls are trying to make a stand here.  It is not yet clear if they will succeed or not.  We broke down from the 1770-1775 area so we have to get back above that to begin to say we could have an important low.  A bounce up to that area that rolls over is likely to take us down to the 200 DMA around 1708.  It has been so long since we hit that MA it just might act as a magnet here.


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