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Tuesday, August 4, 2015

Daily update 8/4 Factory orders

The bulls made an attempt to push the market higher, but failed.

The 20, 50 and 100 MAs are right close together now.  SPX closed below all of them.  Breadth was slightly negative at -52%.  At one point in the middle of the session the breadth was +62%.  There was considerable selling into strength.  There were 99 new highs and 182 new lows. 

We ended the day with a red price bar.  Over the last couple of months that has signaled the end of the rally.  Both the DMI and MACD indicators are negative.  The futures are below all the MAs. 

The bears are getting a grip on the market again.  The short term trend is still neutral, but a close below yesterday's low will turn it down again.  SPX is back below its 100 DMA already.  It appears that MA has finally lost its magic.  The dip buyers are losing their mojo.  The market looks vulnerable here.  Will the bears pounce?

The economy continues to show signs of weakness.  Check out durable goods orders.

This is the 5th month in a row they have been negative YOY.  Unfortunately this data series is rather short.  However, the other two times we had 5 negative months in a row we were either in recession or about to be in one.  Yet another piece of data that suggests the FED should not be raising rates.  I still don't see any signs of the economy getting stronger.  It might not take as much to put into a recession as many people think.


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