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Monday, July 28, 2014

Daily update 7/28

A little selling and a little buying.  While SPX was flat the transports were down over 1%.  Here is the daily SPX chart.

SPX tested below the 18 SMA yet again today, but managed to close back above it.  The dip buyers came in on the early morning weakness and swept up those bargains.  However, the rally stalled in the afternoon.  Here is the futures chart.

The futures made it up to the underside of the up trend line and stopped.  This could be a kiss good bye, but until it rolls back over we can't know that.  We ran into resistance and stopped for now.  The 60 min. chart is also interesting.

 The 18 and 50 SMAs have come together with price.  Price compressed in the afternoon with a couple of doji bars indicating indecision.

Quite a battle going on between buyers and sellers.  The sellers are looking for strength to sell into and the buyers want weakness and hesitate to chase price.  The end result is a market going nowhere fast.  Eventually this stalemate will end.  I am really hoping that happens before I get bored to death.  We have another FED meeting on Wed.   I have noticed a pattern of the market rising the day before.  It appears they moved the FED day rally that used to be so prevalent to the day before.  Don't be surprised if we gap up in the morning.  However, we are still in the area where we have been seeing resistance.  I don't know if they will be looking to sell into a gap up still or not.  Price action continues to be very sloppy and therefore predictions are pretty useless.  I would say SPX needs to get below 1950 to bring out real selling pressure.  Resistance seems to be from 1970 all the way to 1990.  Until we get out of this range buy dips and sell rallies like everybody else I guess.

Here is an interesting chart I saw today.

Despite the massive share buyback in the first quarter GAAP earnings actually declined.  Not to worry though the fictitious numbers were up 4.6%.  It will be interesting to see what happens this quarter.  While earnings are beating estimates I have not heard anything about projected growth yet.  Historically the higher the market's valuation the more important it has been for earnings to grow.  I don't know if that still matters or not since that is a fundamental thingy.


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