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Thursday, May 15, 2014

Daily update 5/15

I got back a little earlier then I expected so here goes.  Clearly something rattled investors today.  All I can find are some comments from David Tepper.  He said "I'm not saying go short, I'm just saying don't be too frickin' long right now" and "The market is dangerous right now."  I have seen him interviewed on TV a few times over the last few years and he has been a raging bull and made a lot of money being long.  His comments could carry some weight.  Here is the SPX chart.

SPX crashed back down through 1885 on a surge in volume.  The 50 SMA held as support for now, but that looks like a failed break out to me.  Lets look at the SPY 60 minute chart.

Now that was some volume this morning.  I see the afternoon bounce had pretty decent volume also.  Never fear, the dip buyers are here.   Once again we have a confirmed break of the 50 SMA.  Will it continue down this time or reverse yet again?  Lets look at the breadth chart.

The 10 DMA breadth lines had a negative crossover for the first time in weeks.  The McClellan oscillator has been in and out of negative territory lately.  This is the third time since early March they have been negative together.  Is the third time the charm for the bears?

This market has been extremely choppy and keeps switching back and forth.  However, IWM clearly failed at the 200 DMA.  The QQQ has tried 3 times to get above the 50 DMA and looks rejected again.  SPX has a potential triple top.  There are so many divergences I can't begin to count them all.  Does any of this matter or will SPX continue to ignore anything negative?  It seems like it might actually correct this time, but then again maybe the bulls have yet another magic trick.

This crazy market is hard to predict day to day.  The late day bounce might continue to retrace some of the down move.  SPX is still above the 50 DMA at this point so the bulls might come out.  If we continue down tomorrow a close below the 50 DMA should see follow through in the days ahead.  The 100 SMA is the next key level down at 1846.


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