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Monday, November 17, 2014

Daily update 11/17

Another slow creep up as SPX makes a slight new closing high.  Here is the daily chart.

SPX is still hanging out between the 6 SMA and the upper trend line.  Breadth was 54% negative.  I am changing the short term trend to neutral tonight.  Despite making higher closes SPX is only 3 points above where it closed on 11/10.  At this price level that is really nothing.  Lets see what the futures chart looks like.

The futures penetrated the 18 SMA overnight, but once again the dip buyers came in to save the day.  While the dip buyers keep showing up there has been no inclination to chase price higher.  This is a pretty long time for equilibrium to persist in such a narrow range.  This kind of pattern lulls people to sleep and then all of a sudden the range expands and the market starts moving again.  Lets take a peek at the IWM chart.

IWM followed through on the down side today from a bearish reversal pattern from two days ago.  I still think this is the key index to watch.  It bottomed shortly before SPX at the low.  It may be giving us a warning sign here. The COMPX was slightly negative also indicating there was an element of risk off today.  If that continues then SPX is likely to succumb at some point soon.  One more to look at is the breadth chart.

With SPX at a closing high both the McClellan oscillator and the 10 DMA lines barely have a positive cross.  This is clearly exhaustion.  This will get resolved with a range expansion thrust bar.  Something will happen that causes rally chasers or sellers to show up en masse.  Which will it be and when?


1 comment:

Anonymous said...

How about HYG? Pretty divergence with SPX...


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