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Monday, September 29, 2014

Daily update 9/29

Dip buyers still active.  The bulls came out first thing this morning to defend the key trend line on SPX.  Here is the chart.

The bulls were happy today the market did not break down.  I commented on 9/25 the bulls need to make a stand here.  So far they have.  Will they win the battle though?  While the bulls started buying right out of the gate the rally stalled when SPX got close to break even.  We spent all afternoon in a trading range with a late day surge that closed the gap on the futures.   We ended with a lower high and lower low from Friday.  The bulls have clearly not done enough yet to say with any confidence this is going to be a low here.  Lets see how the futures chart looks.

The futures are consolidating on the green line that marks the last swing low earlier this month.  The bulls are certainly trying to hold on to that 200 SMA.  However, they have not been able to get any traction yet.  We have bounced twice and each bounce got sold.  This price action looks like it is coiling up for a good move though. 

SPX is being pinched between its 6 DMA and the uptrend line.  One of them is going to give out and that should point the way to the next swing. I hesitate to even guess what happens tomorrow with it being end of quarter.  With so many stocks off their highs and yet a few standouts on the upside there could be considerable portfolio manipulation.  We might not get a good read on where the market is going until Wed.

This is a thought provoking chart.

I have been pointing out the relative weakness in IWM for months.  This chart shows it pretty clearly.  Time will tell if it is important or not.

This is an interesting read with quite a few charts to look at.
Why Stock Investors Should Care What Happens in the Junk Bond Market


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