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Monday, February 10, 2014

Daily update 2/10

Light volume day.  Was it the pause that refreshes or is the rally running out of gas?  Here is the daily SPX chart.

SPX closed fractionally above the 18 SMA today.  Notice the intermediate trend indicator flipped to up today.  It needs confirmation with a higher close tomorrow.  Lets have a look at the SPY 60 minute chart.

You can see that SPY volume was really light today.  At the close it was a bit above the red resistance line, but it is not enough to say it is conquered though.  There were only 66 new highs today and Friday saw 71.  Those are very weak numbers.

SPX closed just below 1800 and at the 18 DMA.  The SPY is showing resistance in this area.  What happens now?  I have no idea.  This is an area where the market could roll over now that the over sold condition is worked off.  If sellers don't show up we will continue to drift higher.  This is a weak rally in that not all indexes are rallying strongly.  The transports and the Russell2000 are lagging.  The COMPX is leading the charge.  Most other indexes are somewhere in the middle.  Nobody can predict when, where, or if sellers will return before SPX makes it back to the highs.  This bounce has not seen any real selling pressure during market hours so it has not been tested in any real fashion.  I am in watch and see mode.  A close below today's low of 1791 could be a sign the bears are back in control.  If the market continues up tomorrow we are likely to see SPX reach the 50 DMA at 1809 soon. 


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