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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.


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