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Trend table status

Trend

SP-500

R2000

COMPX

Primary

Up 7/31/20

?- 3/31/20

Up 5/29/20

Intermediate

Up 10/2/20

Up 8/21/20

Up 10/9/20

Sub-Intermediate

Up 11/10/20

Up 11/4/20

Up 11/9/20

Short term

? 11/18/20

Up 11/5/20

? 11/18/20


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Friday, July 31, 2015

Daily update 7/31

The bulls tried, but ended up getting beat a little bit.


It was another one of those odd days.  SPX closed down slightly, but breadth was +61%.  The new highs came in higher then they have been in a couple of weeks at 114.  New lows remain elevated at 71, but much lower then they were.  SPX stuck its head above the key 2110 level, but failed to stay there.


I added a red line to indicate the level we need a bar to close above to confirm a break of the 18 SMA.  As you can see we spent time above that line on the last two bars, but failed to close there.  While the MACD has crossed positive the DMI lines haven't yet.  We have obvious resistance in this area.  Time will tell if it is insurmountable or not.

The VIX traded below 12 today.  For the last couple of months that has signaled the end of the bounce is near.  The first day of the month has a positive bias.  The bulls may try to make another run, but with the VIX this low I doubt we get too far.  Traders have been conditioned to sell rallies.  They are looking for a signal to do that.  It appears that VIX below 12 is being used by enough people to turn the market down.  Keep that in mind if we start down early next week.

I got the idea to scan SPX for the number of stocks with green and red bars in weekly and monthly charts.  Once I get enough data collected I think it will be very helpful.  I should have thought of that before.  Duh.  July ended with 234 green monthly charts against 160 red.  Although I don't have the data I suspect that is a rather large number of reds with SPX in spitting distance of its high.  When you think about it there are less then 50% of the stocks with a green month.  Intuitively that seems very low.  The weekly numbers are even worse.  The bulls have 189 and the bears get 240 charts.  While July was an up month the bulls don't have a lot to show for it.  Aug. has a negative bias so keep awake.  We appear to have a very weak market.

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

Bob

Thursday, July 30, 2015

Daily update 7/30 The Summation Of All Fears

The bulls held the market up, but could not make an y progress.  Will they be able to hold it up long enough to keep going forward?


Both  price and breadth ended the day dead even.  New highs outpaced new lows for a change 85 to 77.  I guess today did not tell us much.


The futures did not make the higher close yet so we don't have confirmation of a break above the 18 SMA.  Will we or won't we roll over from here?

I think the bulls need to show up tomorrow to keep the party going.  The ice is pretty thin here.  A close below today's low is likely to bring the sellers back out. 

This is a pretty interesting piece of research.  The Summation Of All Fears  This chart and table are from the article.



That is a pretty good track record of spotting bear markets.  It nailed all three we have had since 1970.  I do not consider 1987 a true bear market.  The low was made just a few months from the high.  This backs up my research that indicates we are on the cusp of a bear market.

This is an interesting article a reader sent in.  Market is Thinning Out  That one contains this amazing graphic.


That seems a little out of balance doesn't it?

Bob

Wednesday, July 29, 2015

Daily update 7/29

Upside follow through.


SPX is back above all MAs.  Breadth was another strong day at +69%.  New highs came in at 65 while new lows dropped way down to 76.   Today completely alleviated the short term oversold condition.  Volume was above average once again.  We ended just below the key 2110 level which SPX has not been able to stay above.


The futures poked their head through the 18 SMA.  They need a higher close to confirm a break.  The indicators remain negative for now.  The bulls need to keep pushing prices higher.

Now that we are back up into resistance will the sellers show up again?  My guess is they will.  While we have had many sharp V bottoms in this bull market, that has not been the case this year.  Every attempt has been aborted without making new highs.  I believe this is just a technical bounce off the 200 SMA and it will poop out just like the others. 

Despite beating estimates FB is down on earnings.   That is one of the few remaining strong stocks.  That might have negative implications for the market.

Bob

Tuesday, July 28, 2015

Daily update 7/28 Popularity of Keynesian economics

Now that is the way an over sold buy signal should always work!


When the sellers couldn't break the market down this morning short covering took over.  Volume was pretty heavy again today.  The breadth was a solid +69%.  New highs were still low at 35.  New lows dropped considerably down to 191.  SPX ended just below the key 100 DMA.  There is a possibility that could be resistance now.  We will have to see how the market reacts the next couple of days.  The 50 SMA is up at 2100.


The futures ended the day right at the 100 SMA.  The 200 is five points higher and the 20 SMA is another three points higher.  Sometimes we will contact that MA before rolling over.  It will be lower by morning though. 

We have had plenty of strong days this year that saw no follow through.  This could be a one day wonder on the upside like so many others.  SPX came to a stop this afternoon when it hit the 100 DMA.  Whether that resistance is insurmountable or not is an open question.  One thing is for sure.  Traders have been conditioned to sell rallies.  I think they will continue to do that.  At the last low I showed the 10 day MA of the put/call ratio being the highest since last Oct.  We also had unusually bearish AAII sentiment.  That combination in normal circumstances should have propelled SPX to new highs.  Since that did not happen sellers might become a little more aggressive then they have been the last few years.  Tomorrow is FED day and that can be a bit of a wildcard.  If the FED changes the language in the statement it could affect the market.  I will leave predictions to others.  For the moment the bulls still have work to do.  We are still in a short term down trend.

This is an interesting article that kind of explains how Keynesian economics became so popular.  I always wondered since it makes no sense to me.  "The Bucks Stop Here": Why Keynesian Economics Will Get Blamed For The Crash

Posted a look at high yield bonds on the 401k/IRA blog.  http://traderbob58-401k-ira.blogspot.com/

Bob

Monday, July 27, 2015

Daily update 7/27 Emerging markets breaking down?

A little more down, but not much selling into the morning's gap down.


SPX touched its 200 SMA this morning.  We finally got an oversold buy signal as well.  After chopping around all afternoon there was a retest of the morning low and bounce late in the day.  That might be a setup for a bounce into the FED meeting on Wed.  It has become common to gap up the day before the meeting these days.  The breadth was -70%.  New highs dropped down to 18 while new lows spiked up to 476.  That seems like a of lows with SPX still above the 200 SMA.  Volume has been considerably above average for four days in a row.  All the while there has been no sign of panic selling.  An orderly run to the exits?


China crashing again kept the futures under pressure before the open.  We are getting pretty far away from the 18 SMA.  That is a condition the market has not liked this year.  ADX is climbing fast with this move down.  It will take more work now to get bullish again.

This looks like it could be a bounce setup.  SPX hit the 200 DMA and generated an oversold buy signal at the same time.  However, there has been considerable damage done so I would expect any bounce we get at this point to be of the dead cat variety.  I think we will be hearing about China quite a bit.  That stock market has the tendency to go straight up and straight back down.  With the government taking all kinds of crazy actions I am sure any foreign money that went in is dying to get out.  Equities world wide are under pressure.  I don't think this is going to be just a quick pullback and be over with.  Lets see if the bulls show up tomorrow.

This is an interesting article on how South Korea might be a good leading indicator for the global economy.  Chart Of The Day: Emerging market equities are breaking down  This interesting chart is in there.


The south Korean export data is probably highly affected by the slow down in China.  The global economy may be in the worst shape it has been in since 2009.

Bob

Friday, July 24, 2015

Daily update 7/24

That was the pitter patter of little feet running for the exit.


Volume was heavy for the third day in a row.  SPX closed below the key 100 SMA.  That has been the buy signal of choice for over 2 years now.  Will it be good for at least a bounce this time?  The breadth was -71%.  The new highs dropped way down to 36.  New lows shot up to a whopping 426.  That is the highest since back in Oct.  People have really been selling their losers lately.  The TRIN came in at 1.52.  No real sign of panic selling.  It was just orderly hitting of the bids all day long. 


The futures ended with blue price bars which are usually good for a bounce the next trading day.  Today took the MACD negative.  Notice ADX is rising again.  The -DI line crossed 35 once again.  I can't believe how many times that has happened this year.  That is often good for a bounce also.  Needless to say this chart is fully bearish.  That means the bulls now have work to do to get control back.  If we bounce the 200 SMA could be resistance, but if not the 18 should be.

Today turned the short term trend down in both SPX and COMPX.  One of the pillars holding the market up has been biotech stocks.  They took a severe hit when BIIB's earnings were very disappointing.  That sector is clearly in a bubble so there could be repercussions beyond today.  That might dampen enthusiasm in dip buyers in general.

The XOI closed at a new low since its peak last year.  It seems likely oil will be testing its spring low before too long.  I still don't believe we will see the bottom in oil until production gets shut in by big players such as OPEC.  I would not be surprised to see it in the 30s eventually.

The bears appear to be in full control.  While a bounce is probably due I don't see anything here that looks like this would be an important low.  We are not really very oversold and VIX is very tame.  We had a very good condition at the last low and we still failed to break out to new highs.  That seems pretty negative to me.

Bob

Thursday, July 23, 2015

Daily updatre 7/23

Transports got smacked again.  Most of the rest of the indexes were only down a little.


SPX closed right at the 50 SMA.  However, that MA has not been in play much the last few years.  We are still above the 20, but with the 20 below the 50 that is not much of a bullish statement.  The breadth was -66%.  The new highs were 95 which was a little better then yesterday.  The lows came in very high again at 325.  Volume was slightly less then yesterday, but above most days the last few months.  The breadth and the volume indicate the selling was significant.


The futures found support at the 200 SMA.  This might be a good place to bounce from.  If not, the 50 and 100 SMAs are just a little further down.  At this point I believe any bounce would be to a lower high.

R2000 entered into a short term downtrend today and SPX went neutral.  The COMPX is still hanging on to its short term uptrend.  After three down days on SPX a bounce day tomorrow would not be surprising.  However, the news flow could easily keep pressure on the market.  I think there has been enough damage that we have turned down and it is just a matter of time before SPX turns its short term trend down.

I posted some thoughts on Japan to the 40k/IRA blog.  http://traderbob58-401k-ira.blogspot.com/

Bob

Wednesday, July 22, 2015

Daily update 7/22 Percentage of up days

It was a mixed high volume day.  The utilities, retail, and financials were strong.  Market leading QQQ and IBB ETFs were both down.  Rotation out of the high flyers and into more defensive positions.


SPX closed slightly below yesterday's low.  The breadth was -58% which is pretty much inline with how much SPX was down.  New highs dropped a bit to 71.  The shocker today was new lows spiking up to 331.  That seems really, really high for the little bit we were down.  This type of action reminds me a lot of 2000.  The volatility was a lot higher so swings were much bigger, but.we had similar ups and downs.


The futures made a lower close in the night thus confirming a micro down trend.  Since May that has meant the rally peaked.  Bounces have made lower highs.  For today the 18 SMA proved to be resistance. 

The daily chart remains in a short term uptrend.  The futures are showing a micro downtrend.  There may be a bit of a battle here.  The news flow might have a lot to do with what happens the next few days.

More then half the trading days have been down this year according to The S&P 500 Index (SPX) has done something this year it's never done before

There have been 138 trading days thus far in 2015. Looking at each year since 1950 (66 total years), after 138 trading days, this is just the 16th time that more than half of the days were down days for the S&P 500 Index (SPX). Interestingly, of those 16 years, this year is the only time the index has been positive, as it is up 2.93% in 2015. You can see in the plot below that 2015 is the only point in that upper left quadrant. As you would expect, there's a pretty strong correlation between the number of up days and the percent return for the SPX. However, does the percentage of up days at this point in the year tell us anything about what the rest of the year might do?




The bulls have made full use of the few up days there have been this year.  Many started with big gaps to the upside.  What about the rest of the year?


It looks like we only have about a 53% chance of the market being up the rest of the year.  Doesn't this smell a lot like a pump and dump scheme?  Every time stocks get close to breaking down they pump them up, largely overnight.  Once they get back near the highs they start selling again.  It looks like massive distribution to me. 

Posted some thoughts on Europe on the 401k/IRA blog.  http://traderbob58-401k-ira.blogspot.com/

Bob

Tuesday, July 21, 2015

Daily update 7/21

Uh oh.


The sellers started right out of the gate.  The overall damage to SPX was not that severe, but a lot of stocks fell below their 200 DMAs.  The breadth was -58%.  New highs were only 77 while new lows were 205.  Formerly lagging sectors like the transports, SOX and energies saw some buying.  I think that was a defensive move by money managers that must stay invested.  I don't think there was really anything positive for the market that happened today.


AAPL is having a negative reaction to their earnings and that has taken the futures down a bit after hours.  We ended the day with a red bar, but we need a lower close to confirm a new micro down trend.  That could always happen in the night if the bulls don't show up.  Since we tested the high before we turned down today the odds are probably pretty good this bounce is over.  An up day tomorrow would be normal coming off a high.  Unless it is super strong it would likely be a better time to hedge then to go long.

We have been getting those bounces off the 100 DMA for two years now.  However, this year the market has not been able to make forward progress from those bounces.  That has led to many more bounces then we had the last two years.  Those bounces are an unnatural act for SPX so some group has been responsible for them.  What happens when they stop buying there?  What if they are still heavy long and want to bail?  I am not sure I have ever seen a retest of the highs with internals this weak.  If we turn down now I think it very unlikely the 100 holds.  I have only seen internals like this in 2000, 2007, and 2011.  The 19% drop in 2011 was the smallest one of the bunch. No time to be complacent. 
Bob

Monday, July 20, 2015

Daily update 7/20 Another strange one

SPX tested above the previous high close and came within 2 points of its all time high.


Nothing unusual about that of course.  However, the breadth was -66%.  Even more strange was that new lows came in at 292 while there were only 108 new highs.  This market is messed up.  Pure and simple.


The futures are really, really extended from the 50 SMA.  We got the first white price bar of this rally.  Losing just a bit of momentum there.  ADX is still on the floor. 

Take a look at these charts.


The small and mid cap indexes are making a lower high at the moment.  The transports only rallied three days and have been sideways the last five.  The weakness in MDY is really the first time in years that index has lagged.  It has been really strong throughout this bull market.  The COMPX is at all time highs even besting its bubble peak from 2000.  However, only 56% of the stocks have bullish point and figure charts.  The sell off earlier this month really whacked that indicator.  The advance/decline line and a whole host of other market internals are showing very large divergences.  Too many to show.

I don't see anything consistent with a market breaking out on the upside.  On the contrary it seems to be screaming at the top of its lungs I am topping.  For the moment the bulls have control, but I think that could change very quickly.

Bob

Friday, July 17, 2015

Daily update 7/17 The dollar

Kind of a freaky day.  With SPX only down two points breadth was -70% early on.  Big up moves in very big cap stocks GOOG and FB lifted both SPX and COMPX/NDX100/QQQ. 


It was a very narrow range today.  Breadth ended at -64%.  What makes today a much more negative day then it appeared was new lows increasing to 193.  At the same time new highs dropped to only 75.  This with SPX only four points below its all time high close.  That cannot be healthy.


The futures are getting very extended from both the 50 and 100 SMAs.  ADX is turning up slightly, but it is still on the floor indicating the trend is very weak.  Funny it looks strong doesn't it.  That is why I like that indicator.  It really does a good job of measuring the strength.  We have arrived at the highs.  What happens now?

In another sign of how odd today was check out this chart.

The number of SPX stocks above their 200 MAs actually fell today.  This market is getting extremely thin.  People are gravitating to those few stocks still doing well with their earnings.  I saw that at the last two tops in 2000 and 2007 as well.  The interesting thing is that action causes a few stocks to go up big and that seems to make many people think the market is really bullish.  However, the opposite is actually true.  It is really a sign of how thin the market is.  The money is flowing into very few stocks which causes outsized moves in those stocks. 

July is full of price highs because Aug. and Sept. are often negative months.  With new highs dropping and new lows so high it will be tough for this market to keep going up.  Next week earnings pick up considerably.  That could shake things up a bit.  For now the bulls are in control, but I will be watching closely.  I think this bounce has limited legs and when it rolls over it could roll over in a big way.

The dollar index has been rallying for a while.  Here is a look at the daily chart.


The dollar index has managed to get up to key resistance.  While it may consolidate/pullback some here I expect it will get through it.  That should set up a test of the highs.  This looks like a bullish double bottom basing pattern forming.  After the strong rally we had I would expect it will get to  new highs and beyond eventually.  That would likely be bearish for big cap stocks that get a lot of revenue from overseas. 

I thought these were good comments on the Greece situation.

It is worth reminding readers that nothing has been resolved in Greece other than the passage of a bill that will impose harsh austerity measures for the country in exchange for a "loan to pay principal and interest payments" back to the people who loaned them money in the first place. This is the equivalent of "paying a credit card with another credit card." It keeps the bankers happy but keeps the individual broke.  - Lance Roberts

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

Bob

Thursday, July 16, 2015

Daily update 7/16 IP

SPX closed just 6 points away from its all time high close.  The COMPX made a slight new closing high.


After another big gap up price went sideways all day until a last hour push gained four whole points from the open.  That was enough to get SPX up to the upper Keltner channel line which has stopped the market on recent bounces.  Breadth was a strong +67%.  New highs increased to 150 which is only slightly less then the 172 we saw at the June high.  That was the last time we were in this area.  The new lows at that time were running around the mid 40s which I said was too high for a test of the highs.  Today we had 119 new lows.  That was actually higher then yesterday's 102.  Obviously things are not right.  There is way too many stocks breaking down.


Most of the gains on this rally came in the overnight hours.  Interesting that the ADX is falling on this rally just like every other rally we have had the last few months.  Here we are testing the highs and price is very extended from the 18 SMA.  One might say the market could be getting ahead of itself.  Are people going to be willing to chase price here?  If we stall again will people hold on or sell?  Selling has been the thing to do for the last few months.

The VIX got slightly below 12 today.  It did that right at the tops in both May and June.  People might use that as a sell signal once again.  The market internal divergences are getting really big now.
Here is a look at the number of stocks above their 200 MA as an example.


The last two months have seen a serious deterioration in the market.  SPX is just a fraction below its high close and only 48% of stocks are above their 200.  I think we are at the point now that if we do not break out on the upside and keep going we are going to see a significant sell off.  This market has not been this weak with the indexes at the highs at any time in this bull market.  If I did not know where SPX was and you just showed me this chart I would say we probably have been in a bear market since last July.  It is probably amazing that SPX is at the highs.  Does it really have a chance of staying there and pushing higher?  I think it will be very difficult. I will be watching closely for a rally failure.

The latest IP data came out and it ticked up a bit.


IP stayed above the key 12 SMA for now.  We will have to see if it holds up through next month's revision.  Another positive month would make the picture look somewhat better.  However, IP picked up a couple months in a row earlier this year then plummeted.  What we really need to see is a big jump up in IP and for it to hang on to that jump the next month.  Another little jump up is not really going to clear the current soft patch.

Bob

Wednesday, July 15, 2015

Daily update Retail sales

It was a bit more of a negative day then it looked if only looking at SPX.


The market lost momentum today.  While SPX was only down a bit, IYT (-.71%), SOX (-.62%) and IWM (-.36%) were pretty weak.  Those are important indexes.  The breadth was -58% which was a bit weak for the magnitude of the drop in SPX.  New highs dropped a bit to 108.  New lows increased significantly to 102.  I think that means it is extremely unlikely we are launching a new leg up.  If that were the case new lows would be dropping and definitely would not be over 100.  I suspect this bounce will top out some time this week.


The futures have been sideways now for four bars.  The longer we stall the easier it is to turn down.  Falling back through the 200 SMA might kick off some selling.  The 50, 100, and 200 are all in downtrend order.  If this rally ends while they are still in that position there could be considerably more selling then we have seen so far.

The bulls are still in control for the moment.  That could easily change at any time in this news driven environment.  I don't know if SPX can make it to a new high or not, but I would not expect it to go much further if it gets there.  Stay on your toes.

The latest retail sales report was more of the same.


We have now had several months where the year over year change is very weak.  The last time we had this many weak months together was in 2008 and we were already in a recession.  I saw an article today claiming the consumer is getting stronger.  I just can't see that in the data.  If they are getting richer they are apparently not spending it.  There is no doubt we are seeing the weakest consumer spending in this recovery.  It is even recession looking.

This is kind of interesting.  The Never Ending Range

Today marked the 133rd trading day of 2015, and we are still stuck in the narrow range that has constrained both the upside and downside of the S&P 500 all year.  So far in 2015, there has not been a single day where the S&P 500′s YTD change as of the daily closing bell was greater than 3.5% or less than -3.5%.  That has never happened in the history of the index.  Prior to 2015, there was never another year where the “+/- range” for the S&P 500 this late into the year was under 4% and only five years where the S&P 500 was never up or down more than 6%.

Here is a chart they show of the other years with an extremely tight range to date.


All the other years ended up going higher.  Its interesting that three of the four years were all together in the early 90s.  The only time was in 1952.  The market started new bull markets in 1990 and 1949.  We are 6 years into this bull market.  We have never seen such low volatility this late into a bull run.  Will we end up higher at year end then we are now?

Bob

Tuesday, July 14, 2015

Daily update 7/14 NFIB small business survey

Upside follow through.


SPX closed above the 50 SMA.  The breadth was +60% and the volume increased slightly.  The new highs were stable at 113.  New lows dropped a bit to 40, but still high for this close to the high.  SPX is just 2 points shy of the key 2110 area which it has been unable to stay above.  Is it different this time?


That is quite the upside run in the futures.  They blasted right through the upper Keltner channel.  They are getting pretty far away from the 18 SMA and over the last few months that has often meant a reversal was not far off.  A pause day would seem to be in order for tomorrow.

Trends have not lasted long at all this year.  It seems like every time I change the short term trend to up or down the market stops going soon after.  Is it going to be any different this time?  We have had a number of decent looking thrusts that just simply fizzle out this year.  I don't see anything in particular yet that indicates it is different this time.  I guess we will see.

The latest small business survey is a bit troubling.

The feel good times of last year have vanished.  We are now back into the not so hot readings we had in the prior years.  Here are some comments from the survey.  Emphasis is mine.

The Small Business Optimism Index fell 4.2 points to 94.1, likely in response to five months of lousy growth. The 42 year Index average is 98.0, while the pre-recession average is 99.5 (1974-2007). This leaves the current reading 4 points below the overall average, a deficiency of 40 net positive percentage point responses to the Index’s 10 component questions. While this is not a recession signal, it is a clear sign that economic growth on Main Street is not set for a strong second half. Nine of the 10 Index components fell and 1 was unchanged from last month. Declines in spending plans accounted for 30 percent of the Index decline, and weaker expectations for real sales and business conditions another 20 percent. The deterioration in earnings trends accounted for about a quarter of the decline.

The comment about the second half of the year is quite important.  That goes against what the Wall Street pundits are spouting off about.  Remember how weak the retail sales data has been and how high inventories are.  Businesses do not seem to be excited about a 2nd half rebound.  If they are right then production cuts are probably coming.  With growth already weak that could end up sending the U.S. into a recession.  I just can't see any reason the FED should raise rates or even be talking about raising rates.

Posted some comments on global recession risk at http://traderbob58-401k-ira.blogspot.com/

Bob

Monday, July 13, 2015

Daily update 7/13

Yea, Greece is solved.  Well maybe.  I wonder how the Greek government can sell a plan that is worse then the one the people voted on and overwhelmingly rejected.  It should be interesting to watch.


SPX stopped just below the 50 SMA.  A close above today's high would turn the short term trend up again.  The breadth was +69%.  New highs increased to 119.  The highest in a few weeks.  New lows remain elevated at 79 though.  The 6/29 big gap down was completely filled today.  That might provide some resistance.  The last couple of bounces made it up to the upper Keltner channel.  Can this one make it?  That line is at 2121 now, but is moving down. 


The futures made it up through both the 100 and 200 SMAs today.  There could be some resistance here at the 200.  They still need to confirm the move above the 200. 


The McClellan oscillator is the highest it has been since back in Feb.  That rally powered on to new highs.  The 10 DMA lines are much different this time.  They have not quite made a bullish cross yet, but will tomorrow.  They had positive crosses for a few weeks back in Feb.  I can't say whether that means anything.  Just pointing out the difference.

I have no idea what happens now.  The way the low was made I can't see any evidence that indicates the sellers were finished.  If they weren't they could show up right around this level.  If they were done then we should progress up to at least the 2120 area in the days ahead.  That is unless the news flow turns negative again.  Therein lies the problem.  Has China really stopped going down?  Is the Greek issue resolved?  Are earnings going to be supportive of higher prices?  Any of those things could derail the bounce, but maybe none of them do.  Is another test of the high on the way?

Bob

Friday, July 10, 2015

Daily update 7/10 5 Reasons China Matters

The world woke up in a very happy mood today and the bulls are trying once again to get a bounce going.


The trouble is we did not achieve anything important.  The jury is still out on whether a short term bottom is in or not.  The breadth was a strong +76%.  However, new highs were only 51.  The lows came in at 58.  Volume declined noticeably.  SPY closed only a little bit above the open.  I am sure there was a lot of short covering.  Unfortunately we have not conquered resistance yet.


The futures broke out above the 18 SMA, but they are still in the rectangle.  If they get out of the box they still have the 100 and 200 SMAs above that could provide resistance.  The chart is improving technically, but sometimes that can bring the sellers out again.  The consolidation continues for now.

Everybody was so optimistic on getting a Greece deal they bid up stocks world wide overnight.  How many times have we heard we are close to a deal only to get nothing.  I don't know if this time is the time or not.  If it turns out not we could turn right back south again.  Until the market stops whipping around on every bit of news we are not going to go very far up or down.  Earnings reports will start to pick up some over the next few weeks which could certainly stir the pot even more.  This is a market for nimble traders only for now.

We have worked off the short term oversold condition while going sideways.  That often means more down to come.  The McClellan oscillator turned positive today, but I have no idea if selling is exhausted or not.  We did not get any intraday price action that indicated they were done.  Now that we have worked off the oversold condition they are likely to show up again if they are not finished.  I am tired of saying it all comes down to the news flow, but I really believe that.  We could go either way very easily here.

This is a pretty interesting article on China.  5 Reasons China Matters.  It is short, but a good read.

The short term trend shifted back to neutral on all indexes tonight.

Thanks to everybody that took the time to look at the new blog and answer the poll question.  I will keep working on it for now and see what happens.

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

Bob

Important

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