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Tuesday, September 30, 2014

Daily update 9/30

There were certainly plenty of crosscurrents today as the market alternated between buying and selling.  Here is the daily SPX chart.

SPX climbed above its 6 SMA this morning, but failed to stay there.  Breadth was 62% neg. which was quite weak given the indexes not down all that much.  The small caps were again hit the hardest.  This is going to be a recurring theme because of the over valuation.  After closing back above the 50 SMA the last two days the bears pushed it back below it today.   However, SPX was still above the key up trend line at the end of the day.  This seems like a weak response by the bulls for such an important line.  Lets have a look at the futures chart.

The futures took a bit of a tumble after the market closed.  They are now below the 200 SMA, but were still above it at 4 PM.  They rallied enough today to get slightly above the 18 SMA twice before turning back down into the close.  The bears won the day, but have not quite won the battle yet.  Who will show up tomorrow?

The dip buyers have been doing their thing, but so far they have not been able to over power the sellers.  Its pretty hard to find anything bullish in this action.  Unless the bulls show up in force tomorrow morning it looks like the trend line will break and selling pressure could increase considerably.  We have the 100 DMA down at 1957.  With the poor performance of IWM and the divergences we had in place at the highs I suspect that line won't hold this time.  If the bulls show up tomorrow we have the 18 DMA (1992) and the 9/24 big down bar high (1997) as resistance.


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