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Thursday, March 27, 2014

Daily update 3/27

A slightly lower close.  Here is the daily SPX chart.

SPX closed below yesterday's low making this a confirmed break of the 18 SMA.  Notice the intermediate trend indicator flipped back to up today.  This is a quirk of moving averages.  We closed a bit above the bar that dropped off causing the MA to turn fractionally higher and flipping the indicator.  However, the bar that is going to drop off tomorrow is much higher so unless we have a massive up day tomorrow the indicator will flip back to down.  Volume was quite heavy today.  Since we were only marginally lower there was a lot dip buyers out.  I think you can see this better on the SSO 60 minute chart.

There are a lot of lower tails on the price bars today.  This indicates bulls were out in force supporting the market.  The fact that we closed lower indicates the bears were out with slightly more force.  We ended the day a bit below the neck line, but there is no confirmed break yet.

There was a concerted effort by the bulls to keep SPX positive on the year.  They managed to do that even if only fractionally higher.  Tomorrow is quarter end mark up day so there is the possibility of a bounce.  However, a lot of momentum stocks have been crushed the last few weeks.  We could actually end up with a mark down as funds sell those stocks to get less of them on the books.  I don't see a strong indication either way for tomorrow in the price chart.   Whether the bulls are able to keep SPX positive on the year all the way to quarter end remains to be seen.  The market looks heavy to me and I expert early April will bring more downside if not before. 

TLT extended its break out above 109 today.  I know that a lot of people were expecting rates to go up this year.  There might still be quite a few bond shorts out there, but I don't really know.  If that is the case TLT could squeeze higher yet in the short term.

GLD still not giving us any indication of a low yet.  GDX ended the day positive though.  They both need to turn up for a good low.  Worth watching in this area I think, but it is possible the bigger picture down trend is reasserting itself. 


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