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Friday, March 27, 2015

Daily update 3/27 Global EPS recession?

Not much buying enthusiasm today. 

SPX managed to close in the plus column today, but volume fell considerably.  The bulls have been adding 15 points or more most of the time on the first up day after the close below the 100 DMA.  We didn't even get 5 points this time.  For now buying enthusiasm has clearly waned.  We will have to see if it gets rekindled or not.  Breadth was +55%.  New highs increased some to 55.  New lows also increased some to 30.  It looked a lot like a dead cat bounce to me.

The futures found resistance all day at the 200 SMA.  The price bars look like a consolidation of the big move down so far.  This could turn into a reversal, but that looks like the lower odds scenario.  I think we go lower still. 

The transports touched their 200 DMA yesterday and are not far above their Feb. low.  Remember they did not make a new high this year with the Dow.  That set up a Dow Theory non-confirmation.  A break of the Feb. lows by both indexes would constitute a Dow Theory sell signal.  The Dow still has a good ways to go yet.  This is something to watch in the weeks ahead.

Today looked like a pause day in the downtrend.  We have not had consecutive up days all month.  Will Monday continue the pattern and be down?  I still think SPX is headed to its 200 DMA.

People are starting to talk about a possible profits recession (two quarters in a row of declining earnings) in the U.S.  However, it may be a global phenomenon.

Something is different then what we have seen in this recovery.  Is this why the global stock ETF GWL broke down months ago?  Will a profits recession turn into a full fledged global recession?

The market and sector status pages have been updated.  Have a great weekend.


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