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Wednesday, March 5, 2014

Daily update 3/5

Quite the snooze fest today.  Here is the daily SPX chart.

After yesterday's explosion a pause was to be expected.  Whether that pause turns into continuation or reversal remains to be seen.  The very tight range today is a bit odd after an explosion.  There is often some people looking to take profits.  It seemed more like nobody wanted to do anything.  The SPY 60 minute chart makes that pretty obvious.

We tested yesterday's high a few times today, but there were no rally chasers up there.  Can't say as I blame them.  Volume was light all day.  As you can see in the chart we had complete equilibrium between the bulls and bears.  Which side will flinch first? 

Lots of short term highs are made with a thrust bar to the highs followed by a consolidation bar like we had today.  There was exceptional strength in financials as XLF closed slightly above its Jan. high.  The Dow was down a bit today so it still has not cleared Friday's high much less the Dec. high.  The break out by SPX is still suspect until both the Dow and the transports make a new high.  The key levels remain 1868 and 1850.  My gut feeling is this break out is going to fail at some point so don't fall asleep at the wheel.  If it fails we could easily head down to the 200 SMA or below.  We have not contacted that MA since Nov. of 2012.  We are way overdue!


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