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Monday, January 26, 2015

Daily update 1/26 Bounce back

Most indexes bounced back today.  Tech lagged a bit as INTC warned.  Small caps outperformed dramatically as more and more people are running from the dollar effect on big caps.  Here is the SPX daily chart.

The futures were down 20 points in the night on Greek elections.  People came to their senses and realized the world was probably not going to end on the outcome of a Greek election.  The futures climbed back to only down 2 points by the open.  More selling started right after the open and SPX dropped back slightly below the 50 SMA before the dip buyers came to the rescue again.  The breadth was 65% positive.  More broad based buying.  There were 267 new highs and 50 new lows.  The new lows remain elevated.  Volume dropped from yesterday and price made up about 1/2 the losses.  SPX struggled around the flat line all day after 11:00.  In fact almost all the gains made on the day came in the last 15 minutes.  Lets have a look at the futures chart.

The futures tested the 18 SMA on the overnight sell off, but bounced back strongly.  They popped up a few points right after the close.  Here we are back at the upper Keltner channel resistance.  They still have not confirmed the break above the 100 SMA.  They need a bar to close above 2059 to do that.  While the short term trend is up it has not been nearly as robust as we have been seeing the last couple of years.  Will we break out of the channel and move up or not? 

The snow storm in the north east tonight is going to keep a lot of people home tomorrow so liquidity might be light.  There is a lot of earnings reports this week which may increase volatility.  That combination could cause some bigger then normal intraday moves.  It all depends on the beats and misses in the reports.  SPX has run into some resistance here.  The earnings will either propel higher or repel lower.  Dip buyers have been showing up on every sell off, but rally chasers have clearly been hesitant.  The market looks like it is in show me mode. Time to be patient and let the market show us what it wants to do.

The R2000 did enough to upgrade its short term trend today.  However, we are still in a very choppy pattern and things can change very quickly. 


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