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Friday, April 11, 2014

Daily update 4/11

Down side follow through.  Today confirmed the break down from the trading range, the intermediate trend flip from yesterday, and the break of the 50 SMA.  Here is the daily chart.

SPX closed with a blue bar so it is below the lower Bollinger band and is extended.  There is a slight short term oversold condition, but nothing dramatic.  SPX closed below the 100 SMA today, but that needs confirmation.  We gapped down this morning, but the market rallied back to slightly green on most indexes.  However, sellers stepped in and knocked it back to the lows.  That happened multiple times today.  People were wasting no time selling rallies.  Lets take a look at the SSO 60 minute chart.

Pretty straight down there.  No sign of life from the bulls yet.  Obviously we are stretched away from the 18 SMA far enough to bounce.  It could certainly still continue down though.  I don't see any sign the selling is exhausted yet.  Lets have a look at the weekly SPX chart.

SPX closed below the 18 SMA this week.  It did that last Aug. and rebounded right away.  However, every other time in this bull market SPX traded lower the next week.  It usually closed lower also.  I think odds are pretty high we will trade below this week's low next week.  If we start with a gap up on Monday I will be looking to short it at some point next week.

SPX is over sold enough short term to bounce.  However, I don't see anything that looks like we are close to making an important low.  If we bounce weakly and alleviate what oversold condition we have it would open the door for another big move down.  The traders are talking more and more about selling rallies.  I don't think there is any big rush to put on long index positions.  Be careful.

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


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