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Friday, October 10, 2014

Daily udate 10/10

The bulls failed to show up today.  Here is a look at the SPX chart.

We arrived at key support at the close.  There is the Aug. low and the 200 SMA here.  Quite a bit of volume today.  Breadth was 78% negative and TRIN was 1.39.  While the selling was broad based the TRIN was not particularly high like true panic selling.  There were 15 new highs and 448 new lows.  No shortage of stocks breaking down now.  Will the bulls show up here?  Lets see what the futures chart has to say.

That is a bit oversold.  We are getting pretty far away from the 100 SMA now.  Whether that matters or not remains to be seen.  We might be in a waterfall decline.  Take a look at the IWM chart.

We have a confirmed break of key support.  This is breaking down from nearly a year long topping pattern.  I have no choice but to change the primary trend on the Russell2000 to down.  This is the key bubble index.  I think it will behave similar to how QQQ did in 2000.  It will lead the way down and is likely to go way, way down.

I think there is a real chance the bull market died today.  There are several things that point to that being the case.  There is more then I have time to cover tonight.  I need to write up a post on it when I get a chance.  Next week is option expiration which has an upside bias.  However, when it is down it can be down big.  SPX is at support and a bit oversold.  However, despite what it looks like on the chart it is not real over sold in the short by my favorite measures.  This market is kind of exhibiting run away behavior on the downside.  We ran down into the close and stopped going down only because the market closed.  We don't have any sign of selling exhaustion.  That makes it pretty hard to predict what happens next week.  The bulls could show up on Monday and start a bounce or the bears could show up and continue the waterfall.  The bulls need to get SPX closed back above 1925.  If we don't stop here at the 200 DMA the next major support looks like 1880-85 area. 

I had to put a question mark on the primary trend of the COMPX tonight.  It has backed up into the Feb. price action and that is plenty far enough back to question its uptrend.  SPX has not quite done that yet.  A confirmed break of the Aug. low will change its status though.

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


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