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Tuesday, June 9, 2015

Daily update 6/9 Wholesale sales

SPY posts a perfect doji.  Buyers were kept in check by world indexes being down to start the day.

SPX did not close below yesterday's low so it did not confirm the break of the 100 SMA.  It was another very odd day in that the breadth was -62%.  Despite that very negative breadth SPX closed flat and most indexes were little changed.  We have seen quite a few odd days this year where the breadth and the size of the moves in the indexes does not seem to match up.  It looks like SPX is trying to hold support here. 

The futures stayed above the overnight low all day today.  They have moved up enough to get a white price bar.  The -DI line has crossed back below the ADX line.  It should be easier to get a bounce going tomorrow then it was today.  Especially the way the market reverses whenever it gets a little extended in ether direction.

A bounce attempt seems inevitable here unless we get some really significant negative news.  Even during the Ebola scare when SPX dropped down below the 200 DMA it put up  a fight at the 100.  A break out above today's high should get some short covering going.  Whether rally chasers show up if we get to higher prices is another thing entirely.  The VIX has been unable to sustain itself above 15 for very long.  That has probably worked against the market making much upside progress.  Lets face it the market is over valued.  I think many people want to see a bigger pullback before putting new money to work.   Will the bulls show up once again like they have been for the last two years?

Wholesale sales finally ticked up in May.

That helped the inventory to sales ratio a bit.


The question is whether this is truly a pick up in sales or more of a restocking affair that is short lived.  We will have to wait for more data to know.  Maybe winter is finally over.

Now for something truly bizarre.  According to Bespoke having a triple crown winner is usually negative for stocks the rest of the year.  Why the Bulls Will Be Rooting for Any Horse BUT American Pharoah

Really, really odd.  Looking at the dates of the past winners they all happened in secular bear markets.  Why is that?  Maybe the hot stock market of the 50s, 60s, 80s, and 90s made people spend more time breeding good stocks then good horses. That actually makes sense.  Stud fees are expensive and the results are a crap shoot.   During secular bull markets it is easier to pick a winning stock.  Maybe after two market crashes a little more money got put into breeding horses.  I see no logical reason for the market to go down after a triple crown winner though.  As they say correlation does not necessarily mean causation.  It will be interesting to see if it is different this time or not though.


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