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Tuesday, April 21, 2015

Daily update 4/21 China rail traffic

SPX gapped up into resistance and found a few sellers.  Biotechs were very strong on takeover news or the market might have been weaker.

Volume increased over yesterday on a reversal looking bar.  Breadth was slightly negative.  If that daily chart was upside down it would look like a pretty good long setup.  So far 2110 is holding as resistance.  This market is certainly winding up for a big move.

The futures are still above the 18 SMA.  Last night I said they needed to close a bar above yesterday's high to get the bulls back in control.  That would have confirmed an upside break over the 18 SMA.  The futures tested above that high in the night, but sold off after the open and the bar closed slightly below the high.  We now have four complete bars above the 18, but still no confirmation.  That usually means it is going to end up reversing back down.  Today's action raised the bar for confirmation.  Now we need a bar to close above today's high.  We still have a negative cross on the DI lines.  This chart is pretty interesting.   The last low took quite a while to form.  Now we have a multi day pattern forming at the highs.  Talk about indecision.

The daily chart looks like the bears could reach out grab the power pretty easy.  The sellers did not waste any time this morning selling into the gap up.  However, the bulls would not let them break it down.  I suspect that was because of the strength in the biotechs.  That may or may not be the case tomorrow.  It seems like we should be very close to a decision here.  Break out or break down.

More poor looking data from China.  Check out this chart.


They are experiencing a worse drop then they saw during the great recession.  As reported earlier both imports and exports dropped double digit percentages last month.  This chart certainly backs up that weak data.  No sign of a turn around yet.  With the Euro dropping the way it did late last year Chinese exports could continue to come under pressure.  We can see why the PBOC is in panic mode.


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