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Friday, June 26, 2015

Daily update 6/26 ECRI paper on recessions and recoveries

That was a very mixed day.  Lots of cross currents.  Check out the SOX index.

SPX closed fractionally below yesterday's low.  Not enough to say we have confirmation of the break of the 20 SMA though.  Today's low was right at the key 100 SMA.  We have been sideways for so long it did not take much of a pullback to touch it.  We don't even have a red price bar yet.  We are not going to be able to get a decent oversold condition around that MA this time.  Will buyers rush in anyway?  The breadth was -58%.  I don't know if my new high data is stuck or not.  It shows this to be the third day in a row of 84 new highs.  The WSJ site says there were 88.  New lows shot up to 193.  Stocks continue to break down. 

The futures hit the lower channel line this afternoon and bounced.  This is a good setup for a bounce on Monday.  News permitting of course.  There could definitely be Greece news.  I have heard rumblings that a deal must be struck before the markets open on Monday.  I guess we will see what that is.

In the absence of bad news a bounce on Monday seems likely.  However, in this news driven environment who knows.  While we hit the 100 DMA today the buy signal has been a close below that line not a touch.  The VIX has not touched 15 yet on this decline.  The 15 level has brought buyers in a few times the last couple of months.  We don't seem to have any oversold ammo for anything but a dead cat bounce at the moment.  We are still very weak internally.  The kind of weakness that can lead to a mini waterfall decline.  The bulls really need to show some strength.

I found this research paper pretty interesting from the ECRI.  Shifting Patterns in Recessions and Recoveries  This is just one of many interesting charts in the presentation.

Despite export prices dropping, volume is not really picking up.  Many economists expect a pickup in the global economy largely because of the price drop.  We will see if it materializes.  The paper is well worth the few minutes it takes to read.

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


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