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Friday, September 12, 2014

Daily update 9/12

The sellers showed up again without hesitation.  Here is the daily SPX chart.

SPX closed below the 18 SMA again.  It also closed below July's high close for the first time this month.  However, it did not close below the recent intraday low.  Volume increased again.  Breadth was 77% negative so the selling was broad based.  Lets see what the futures chart has to say.

The futures closed slightly below the support line.  They made a slight new low for this pullback, but they rebounded enough to get above the prior low.  The -DI line has moved up, but is still below the key 35 level.  If we are going to go down significantly here that should happen soon.  Just like they have all month sellers showed up on the green price bar from yesterday.  Obviously there are people looking for strength to sell into.  How much ammo do they have?  This is one of those tricky situations.  We closed below support, but there is the possibility of a double bottom and bounce. 

Things are muddled at the moment in the short term.  That should not be a surprise with all the question marks in the trend table.  There are people selling strength, but whatever the reason is it does not seem to be widely known.  There are so many things going on take your pick.  However, despite all that the dip buyers keep showing up.  We are oversold a bit short term with a possible double bottom so those dippers might show up again.  Longer term I believe we have started down for the biggest move down in quite some time.  We had the weakest technical condition this entire bull market at the highs.  This week we had Wall Street strategists jumping all over themselves raising SPX targets.  It even prompted one of the TV hosts to ask the question where did all the bears go.  Overly bullish sentiment combined with a weak technical pattern usually means a sizable down move.  Even if we bounce next week I don't think we will get much past the highs.  If we continue down we have the 50 DMA 1972 and the 100 DMA at 1944 as support.  There is also a rising trend trend line in the middle of those moving averages that could come into play.  Who is going to show up to play on Monday?

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


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