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Tuesday, May 26, 2015

Daily update 5/26 Break out failure

SPX made a valiant effort to stay above the April high of 2125, but found no buyers.  I guess some of the bulls ran out of patience today.

SPX closed below the 18 SMA.  The breadth was -71% so the selling was broad based.  The new highs dropped down to 39 while the new lows increased to 75.  Looks like we should be in pullback mode.  We need a close below today's low to confirm a new short term downtrend though.

The futures are trying to hold the 100 SMA.  The -DI came within .06 of hitting the key 35 level.  We have had several 35 readings this year, but the bears have not stepped through that open door to cause a bigger decline.  Will they do it this time?  The MACD is also on a sell signal.  The bulls have some extra work to do now to get bullish again.

Both breadth indicators are negative.  The McClellan actually crossed negative on Friday so this was confirmation of that bearish indication.

Today SPX followed the day of the week pattern this year by going down.  Wednesdays have also been down days with Thursdays usually being up.  However, the TRIN closed right at 2.  That often brings out some buyers the next day.  Whether that bounce could last all day is a tough question.  We have not really declined all that much.  It seems unlikely the bulls will step in with a lot of force at this point.  It would be more of a question whether sellers show up again tomorrow at higher prices or  not.  Unfortunately my crystal ball is on the blink tonight. 


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