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Tuesday, September 23, 2014

Daily update 9/23

A close on the low of the day.  That has been very rare the last 18 months or so.  Here is a look at the SPX daily chart.

SPX confirmed yesterday's break of the 18 SMA with the loser close.  It ended the day about 3 points above the last swing low.  No panic selling going on yet.  Just people hitting the bids.  There were 15 new highs and 136 new lows.  With those numbers it is hard to believe SPX is still above the 50 SMA.  Lets take a peek at the futures chart.

The futures closed below the first green support line.  They also tested the last swing low denoted by the second green line.  Unlike the last pullback they dropped below 100 SMA.  Will support hold again?

We now have a slight short term over sold condition with price hanging around prior support.  Will the dip buyers show up here again?  Even if they do I think we end up going lower still.  We had the lowest number of new highs since last Aug.  SPX has been dropping down to its 100 DMA with less selling pressure then this.  It seems likely to go at least that far now.  One of these days that 100 is going to fail.  With the weak technical condition we had at the highs this could be the time.

Bespoke put out an interesting chart on the performance this year of some key cap based indexes.

I pointed out the weakness in micro and small caps on the blog.  However, the latest new highs in SPX were not confirmed with a move by mid cap stocks to new highs.  Market weakness seems to be moving up the market cap food chain.  Only big caps are left.  Will the infection spread or will the lower cap stocks start getting a bid?


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