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Trend table status

Trend

SP-500

R2000

COMPX

Primary

Up 7/31/20

?- 3/31/20

Up 5/29/20

Intermediate

Up 10/2/20

Up 8/21/20

Up 10/9/20

Sub-Intermediate

Up 10/15/20

? 10/21/20

Up 10/13/20

Short term

? 10/19/20

? 10/19/20

? 10/19/20


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Thursday, October 16, 2014

Daily update 10/16

Rotation into small caps today.  The internals were much stronger then one would expect with SPX only marginally up.  Here is the daily chart.


Another strong volume day.  Once again there were enough buyers to absorb all the selling.  SPX tested yesterday's high, but failed to stay above it.  However, it did not collapse after that.  This is a real funky two bar pattern to make a short term low.  However, it is kind of similar to the July 2010 low.  I looked back to 2003 and did not find any other similar pattern at a low.  Statistically speaking that probably means the odds are not all that great this makes a low, but it looks like it could happen.  SPX is certainly stretched enough on the downside to bounce.  Breadth was 68% positive.  There were only 179 new lows which is a big drop from yesterday.  Selling may be exhausted down at these levels.  There could be plenty of shorts to squeeze also if we get going up.  Lets have a look at the futures chart.


Overnight the futures got pretty close to yesterday's low.  They rallied from the opening gap down right away.  I suspect people are buying the oversold market for a trade.  So if we do rally from here the selling is likely to return when these buyers go to take profits.  Lets have a look at the breadth chart tonight.


The McClellan oscillator is barely negative.  This is in sharp contrast to the usually deep oversold condition at most lows.  There are two consequences of this.  If the market keeps going down this indicator has quite a bit of room to fall before becoming deeply oversold again.  If the market rallies it will get overbought quickly and before price has a chance to really establish an uptrend again.  I think we are in buy the dip and sell the rip mode.  Once this indicator gets overbought some people may take profits.

Whether or not we have a major outbreak of Ebola in this country I think it will be very disruptive this winter if we have more sporadic cases.  Here is an interesting article about the virus itself.  Ebola! How Worried Should We Be?  Here is a snippet that explains why flu season could be a problem.

Early symptoms of Ebola include the sudden onset of fever, intense weakness, muscle pain, headache and sore throat. Unfortunately, that pretty much describes any reasonably intense flu, which complicates screening procedures and causes unnecessary worry among those who merely have the flu but worry about the possibility of Ebola.

Nonetheless, authorities have no choice but to take every traveling passenger with these very ordinary flu symptoms as a possible Ebola case. It's a safe bet we’ll hear plenty in the coming days and weeks about Hazmat-suited response teams escorting sickly passengers off of planes.

When flu season gets going in earnest the entire health care system might be strained.  What else can happen.  Some travelers with flu that ordinarily probably would not go to the hospital will now go to make sure they don't have Ebola.  This could definitely get messy.

Bob

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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.