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Thursday, March 13, 2014

Daily udate 3/13

Was that a flight to safety?  I think it was.  Check out the TLT daily chart.

That was quite the move up in TLT today and on heavy volume.  Considering that TLT gapped down and SPY gapped up it was not on over night news.  Some people suggested it was caused by Germany taking a hard line with Russia over Ukraine.  There are quite a few big green volume bars in this chart going back to last fall.  It looks pretty bullish to me.  I mentioned this on 3/7 on the last swing low.  I hope some of you got in on the action.  On to the usual look at SPX.

SPX closed slightly below the key 1848 level.  This is the second time SPX broke out above the Jan. high and failed to stay there.  How many more chances is it going to get?  Volume was slightly elevated today, but nothing extreme.  Breadth was 67% neg. and trin was 2.4.  That suggests that the selling was heavy, but not a panic.  Lets zoom in to the SPY 60 minute chart.

SPY held my former resistance line as support today.  It gapped up over the 50 SMA this morning, but failed to hold it.  The selling into strength was persistent right from the opening bell.  The same with buying in TLT as it started up right after the bell.  Last night I said "All afternoon the bulls defended yesterday's low (186.8).  If we break below that level I would expect an increase in selling pressure."  I hope some of you took advantage of that.  We have a few big red volume bars now so the pattern has shifted back to distribution. 

The 10 DMA breadth chart had a negative crossover today.  That makes both breadth indicators negative.  We are a bit over sold in the short term on the 60 minute chart.  That may get a bounce in the morning, but this is kind of tough.  We effectively have a double failed break out on SPX which could give people a reason to sell.  We are not oversold on any longer term measure so another down day tomorrow is certainly possible. 

We closed under the key 1848 level, but not by much.  The bulls may make an attempt to save the day tomorrow.  Or not.  I don't have a clue.  Regardless of what happens tomorrow I think there is plenty more selling to come.


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