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Thursday, February 13, 2014

Daily update 2/13

Bulls bought the opening gap down.  Here is the daily SPX chart.


SPX closed above yesterday's high and the .786 retrace level.  In theory that means it should test the all time high.  The higher close confirms the upside break of the 50 SMA.  Breadth ended the day strong and new highs were 140.  That is still a low number, but is improving.  This is a very aggressive retest.  If we keep going at this pace we will be very over bought when we get to the highs.  That will increase the odds the retest will fail.  Yesterday was a doji bar and today was a bullish engulfing bar.  That should be a bullish combination.  Lets look at the SPY 60 minute chart.


The big gap down this morning was bought right out of the gate.  There is one more gap above I marked with a red line.  It looks like it wants to close that gap to me.  There might be some resistance at the line, but there has been no resistance insurmountable so far.  It only seems to slow the market down for a few minutes.
 
SPX is only 20 points from the highs now.  At the rate this market has been moving it could do that in one day, LOL.  I can believe that everybody that wants to put money to work wants to get it done before we get to the highs.  At the moment I think we need a close below the 50 DMA to get bearish again. 

The Russell2000 caught a pretty good bid today.  The Dow and the transports are still lagging.  The financials were lagging a bit also.  After two 90 percent down days I think it is important all major indexes get into new high ground to be able to say the market is out of danger.  I suspect that won't happen, but we will see.

Bob

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