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Wednesday, April 1, 2015

Daily update 4/1

Yet another strange day.  Despite most indexes ending down breadth ended slightly positive.  There have been quite a few breadth/price mismatches this year as noted in the blog.  I have no idea if it is important or not.  All I know is that it is strange.  They are normally pretty rare.  Something may be going on under the covers, but I can't quite put my finger on it.

SPX tested below the 100 SMA this morning and held.  It even bounced going into the close.  It looks pretty clear there are people out there that do not want to see that 100 SMA broken.  I do not know who they are or how deep their pockets are.  This is clearly a manipulated market, but I am not on the email list with instructions.  What is so weird is that in the history of SPX you find the 100 SMA to be pretty unimportant.  It only rarely comes into play.  So why did they chose that line?  It looks like it is getting harder to maintain that support as we keep hitting it.  They say the more times you hit support the more likely it is to break.  This is seven hits just since Dec.  If it breaks we are likely to cascade down.  Some day it will happen, but when.

Overnight the futures tanked (something to do with Japan) and tested the last swing low.  The -DI line hit 35 yet again.  The selling pressure just keeps coming.  The futures bounced pretty strongly into the close and are up a bit after hours.  While we had a move down through the 200 SMA we did not get confirmation of a break.  Now we are back above that key line.  News flow permitting this looks like a bounce tomorrow.  The bulls need to show up with some volume though to get a true rally going I think.  The last bounce was really half-assed. 

I have seen lots of patterns over the years.  However, normally once I discover them it is not long before they change.  This 100 DMA pattern has been alive for a year and nine months.  It certainly is not random action to say the least.  I find it truly amazing.  I am curious about what happens when the pattern breaks.  My fear is there will be a massive run for the exits all at once.  It is the same old story.  People add money slowly over time, but they all want to take profits at once.


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