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
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