If you would like an email sent to you when I update the blog please send an email with "subscribe" in the subject line to traderbob58@gmail.com. To be removed use "unsubscribe".

Search This Blog or Web

Tuesday, October 7, 2014

Daily update 10/7

It is different this time.  What that means remains to be seen.  Here is the daily SPX chart.

SPX closed below the 100 DMA again.  The prior six pullbacks to below the 100 DMA went on to new highs once it closed back above the line.  We closed back above it for two days this time, but did an about face today.  We also closed below the key trend line from the 2011 low.  I added a line from the Aug. low.  This is a very important line.  If SPX breaks that it would confirm the potential double top pattern that is brewing here.  We had 24 new highs and 181 new lows.  The TRIN closed at 1.4 so it was not particularly high.  While we have a blue price bar indicating SPX is below the lower Bollinger band we are not particularly oversold on a short term basis by other measures that I use.  The little relief rally removed some of the tension.  There is more room to fall now.  Lets have a look at the futures chart.

The futures closed right near the low of the bar and below the 4 PM close.  The only nearby support we have here is the 10/2 low.  Will it hold if tested?  If that breaks the Aug. low is the next support.  Lets have another look at IWM.

IWM closed slightly below the key support line.  That line goes back to Nov. 2013.  If we end up breaking down it will turn the primary trend of IWM down.  That is nearly a year long formation now.  That would be a significant event.  Do the bulls show up to rally the troops tomorrow or do the bears take over? 

We are in a position we have not been since 2012.  We have a lower close below the 100 DMA.  How do market participants react to that?  Historically SPX has an interesting relationship with the 100 DMA.  Most of the time when it breaks it there is a quick move to the 200.  This also works when the 100 is below the 200 and breaks up through it.  In this particular case SPX has not seen its 200 DMA since back in 2012.  A lot of people have piled into this market since then.  It is easy to see how there could be a rush to the exit to lock in some profits.  Its not like there is nothing going on in the world like say the end of QE and a global economic slowdown.  The bulls need to get SPX back above the 100 DMA to attempt to get control back. 

Here is an interesting look at the latest employment report. "Hiring Grandparents Only": 230K September Jobs Added In 55-69 Age Group; 10K Lost In Prime, 25-54 Group  Here is one chart that caught my eye, but there are several more that are interesting. 

This really seems odd.  The 16-19 and 55-69 age groups were responsible for all the jobs gained.  The key prime working age group 25-54 actually lost a few jobs.  The 20-24 group makes sense as kids go back to college.  I have no idea why the older age group got so many jobs though.  The economy would be much better off getting full time jobs in the 25-54 age group. This isn't a new trend.  If you peruse the charts in that article you will find this age group has been lagging in jobs for years.  Not good.


No comments:


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