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Tuesday, March 24, 2015

Daily update 3/24 China slowing more

The bulls did not show up on schedule today.  That breaks the recent pattern of every other day a different direction. 

There seemed to be a distinct lack of buying interest above 2105.  Breadth was -54% which was not particularly high.  Volume was light so it did not take much selling pressure to send the index down.  New highs dropped down to only 109.  That was 145 less then yesterday.  That seems like quite a considerable drop in the enthusiasm level relative to the size of the move down.  From what I can gather there were a couple of FED speeches lately that attempted to put June back on the list as a rate hike possibility.  That may be putting a damper on the buying enthusiasm.  At any rate if the bulls don't show up tomorrow this little bounce could be over.

The futures landed right on the 18 SMA at the end of the day.  We have a red price bar at potential support.  If this rally is going to continue that should be enough to bring out the bulls tomorrow.  Except for Jan. they have been really good about buying the first red price bars after bounces off the SPX 100 DMA.  We did not usually get the red price bars though until we were well clear of the Keltner channel.  The rally in Feb. is the only move up this year that really showed some enthusiasm.  The rest of the bounces have been pretty lethargic. 

I had to laugh today I read a piece that said something to the effect that by any measure this market is on a tear.  As I look at the daily char I see SPX right where it was 3 months ago.  Since 2009 the market has definitely been on a tear.  However, in the last six months that really isn't the case.  We are a whopping 3% higher then we were back in Sept.  At .5% a month I would dare say we are creeping not flying.  That author sees the market as very strong while I see a market struggling to go up.  That is a big difference in perspective.  Am I the one out in left field?  Is this still a very strong market or one that is struggling?  Will the bulls show up tomorrow and send this market sky rocketing once more to new highs and beyond?  If the bears show up again tomorrow and we end up lower this bounce is probably in trouble.

Recent data out of China does not look particularly good.  Is China's growth slower than the 7% consensus?  There are a number of interesting charts in that article.  Here is one of them.

Here is another article with some charts.  China Lands Hard: Rail Volume Plunges, PMI Tumbles Into Contraction, Employment Worst Since Lehman  This chart may be showing that the stimulus they keep doing in China is having less and less effect.

China is experiencing falling real estate prices over large parts of the country.  We know how that can be very rough on an economy.  I think it is highly likely that China is struggling much more then the government would like the world to believe.

I saw this rather interesting quote from Jon Markman:

I promised I would quit ragging on the Apple Watch, considering it has not even released yet, but need to break that vow for just one minute. I was talking this weekend to someone who has an inside view of Apple's television commercial development process. He said the ad development team had spent the past month creating spots for the Apple Watch and were amazed at how ordinary and over-priced the devices are. Apple's in-house marketing team apparently has a cynical attitude that they can slap an Apple logo onto anything and persuade people to buy it. I think that attitude is going to be tested in this case. Unless I am missing something, I bet the Watch unit sales disappoint. 

I have seen quite a few regular Apple supporters having trouble figuring out a reason to buy the watch.  I also have a feeling there is risk that sales disappoint.


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