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Friday, September 19, 2014

Daily update 9/19

Resistance persists at least for today.  Here is the daily SPX chart.

The sellers showed up right at the opening bell and kept hitting the bids all day.  Despite the gap up and strong start we ended the day with most indexes in the red and breadth 59% negative.  New highs were 127 and new lows were 102.  On a day with all happy talk and the launch of the biggest IPO in history (Alibaba) we saw over 100 new lows.  In a normal market that does not happen with indexes at all time highs.  The last two days we had famed Hindenburg omens.  That link will tell you the definition if you are not familiar with them.  There have been several since I started this blog, but I have never mentioned them before.  They have a lot of false signals.  After every one of those signals in this bull market I was able to find a number of articles pointing out the signal and how it portends doom.  I searched the internet to try to find a mention of yesterday's signal and came up empty.  The ZeroHedge web site has a notoriously bearish slant and they have jumped on the other signals but had no mention that I could find.  With the weak technical condition of this market and this signal happening at all time highs I have to think there is a possibility it could be a warning flag this time.  The lack of press most likely means even the bears (what few there are out there) have stopped looking for warning signs.  This looks like a textbook bull market top to me.  I guess we will see what happens.  Here is a look at the futures chart.

The futures ended the day slightly below their prior high.  This is potentially a failed break out, but since it is only marginally below we need to see follow through.  Below the 50 SMA would be a good sign the break out has failed.  Falling below the green support line again will likely bring on more selling.  Do the bulls come back next and try again?  Will the bears strike while the iron is hot?

IWM was down 1.5% and is back below its 200 DMA.  The daily SPX chart looks pretty suspicious as a short term double top combined with a slightly larger double top higher high with the July high.  Just about every index has possible topping patterns sitting out there in plain sight.  If sellers show up next week they could do more damage this time.  The last time we had new lows this elevated at all time highs in SPX was around the 2000 top.  It is a sign something is wrong.  I can't say it any clearer then that.  I don't know what is bothering the market.  It could be one of many things.  The bottom line is that something is wrong and we will likely only know what it is later in time.  Don't be lulled to sleep here.

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


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