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Monday, August 31, 2015

Daily update 8/31 SPX and R2000 primary trends turn down

SPX closed below the monthly 20 SMA.  Its weekly 13 EMA crossed below the 34 EMA and the 200 DMA turned down.  That is three different popularly used trend identification tools that are negative.  The same thing applies to R2000.  That is not the case with the COMPX yet.  These confirmations come on top of the Dow Theory non confirmation at the highs and subsequent sell signal.  The evidence that we are in a bear market continues to mount.

Resistance at the lower Keltner channel held again today.  Breadth was -53% which was not really inline with the size of the move down.  Bigger cap stocks must have been a drag today.  New highs came in at a whopping 5.  New lows picked up slightly to 38.  Not encouraging stats for bulls.  Single digit new highs is a very weak market.

The futures look real close to rolling over.  I think the bulls need to show up in force tomorrow to keep the bounce going.  There were enough dip buyers today to keep the market from collapsing, but I don't think that will work again.   The bulls need upside.

I don't have enough information to call the bounce dead yet, but getting close.  If the bears show up again tomorrow it could be trouble.


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