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Wednesday, May 7, 2014

Daily update 5/7

The bulls came in today trying to hold the market up.  Here is the daily SPX chart.

SPX dropped below the 50 SMA for a bit this morning and the selling just stopped.  The market floated up the rest of the day amid bouts of selling into strength.  A big push at the end of the day made it look better then it probably was.  The volume picked up today, but a lot of that was in the morning sell off.  Will the bears show up again tomorrow?  SPX is on thin ice and still below key resistance.  Lets have a look at the SPY 60 minute chart.

SPY may be forming a down trend channel.  It ended the day at the upper channel line and the 50 SMA.  A perfect place for the bears to attack from if they so desire.  The first hour sell off had considerable volume and added to the distribution bar count.  SPY did not get above yesterday's high. Will it break out of the channel tomorrow or be turned back?

I want to take a look at a monthly percent change chart of SPY, IWM, and QQQ tonight.

Throughout this entire bull market SPY, IWM, and QQQ have topped in the same month whenever they corrected.  That is until now.  There is quite the disparity at the end of this chart.  IWM and QQQ are primary risk on/off indexes.  They are in risk off mode even if SPY has not fallen yet.  Something is different this time.  I am having a hard time believing that SPY is not going to join them at some point.  The VIX remains low and there is no panic in the air simply because the Dow and SPX have not caved in.  The bulls point to them and say all is well.  This does not look like all is well to me.  I guess we will see.


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