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Wednesday, June 3, 2015

Daily update 6/3 Latest P/E snapshot

The market continues to try to not go anywhere.

I thought that yesterday's retest of the 5/26 low might bring out some buyers.  It did, but the initial rally attempts got sold into.  At the end of the day most indexes were positive, but the breadth was dead even.  That is like the slow creep pattern only we aren't at new highs yet.  New highs picked up to 102.  New lows remained elevated at 58.  Oddly IWM was up over 1%.  What is odd about that is that IWM is the index that most closely tracks the breadth data.  Given that breadth was flat it indicates a small number of stocks in IWM were responsible for the big move.  Not a healthy situation.  SPX still remains below the 18 SMA. 

The futures ended the day above the 18 SMA.  However, they have not confirmed the break out yet.  We need a bar with a close above 2120.75.  The last time we had green price bars the sellers emerged and sent us down below the 100 SMA.  Will it be different this time?  No crystal ball here. 

Every time this market looks like it is about to go up it rolls over.  Every time it looks like it is ready to go down for real it bounces.  To swing trade SPY you need a holding time of hours these days.  I think this is the absolute worst trading conditions I have ever seen.  If you are not a day trader or a very good stock picker you are probably finding making money pretty tough.  This is a good time to not over trade.  There will be better conditions coming.

I occasionally see articles claiming the market is not over valued.  This usually involves some method of valuation I never heard of with no chart.  They seem to expect us to just take their word for it.  Here is a snapshot from the WSJ site based on TTM GAAP earnings.  No fake stuff here.

The facts are the facts.


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