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Friday, March 7, 2014

Daily update 3/7

More of a mixed day then yesterday.  The QQQ had a key reversal day.  A last minute push up got SPX to a positive close.  Here is the daily SPX chart.

SPX had an outside day.  We had two of those back in Jan. marked with yellow arrows.  In both of those instances SPX closed slightly higher the next day then sold off.  Those are actually quite rare for SPX.  I don't remember ever talking about them in the update until Jan.  I think it represents a power struggle between the bulls and bears.  The bears won before.  Who is going to win this one? Lets look at the SPY 60 minute chart.

Volume was higher today, but the end result was a flat day.  At a high that is probably a sign of distribution.  We keep having this pattern of making the high of the day in the morning.  That is different then what we saw the last few years.  When the market was in rally most days saw the low of the day in the morning.  That has not been the case the last couple of weeks.  That could be subtle distribution.  This chart is pretty much flat awaiting a catalyst for the next move.

The transports made a new all time high today.  The Dow is still lagging behind.  Two market leading sectors biotech (IBB) and tech (QQQ) are showing some weakness.  Despite the slightly higher close in SPX breadth was negative.  New highs dropped down to 210.  The market appears a little tired.  I think we will get a resolution on this break out of SPX next week.  We will either get another buying spree that pushes the Dow to a new high or this market sells off.  I think it will be down, but I have been wrong before.  The daily SPX chart is pretty sloppy.  I think last Friday's high of 1868 would be an early warning sign of trouble.  However, the real break out level is 1848.  So a close below that would definitely be a major negative. 

The market and sector status pages have been updated.  Have a great weekend all.


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