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Trend table status

Trend

SP-500

R2000

COMPX

Primary

? 3/31/20

?- 3/31/20

Up 5/29/20

Intermediate

?- 5/29/20

?- 5/29/20

?+ 5/29/20

Sub-Intermediate

Up 4/20/20

Up 4/22/20

Up 4/17/20

Short term

Up 5/20/20

Up 5/20/20

Up 5/20/20


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, October 30, 2015

Daily udpate 10/30

Exhausted.


SPX tested the 10/28 high multiple times again today.  At one point SPX sat at new rally highs for over an hour waiting for buyers to show up.  They didn't.  Eventually somebody hit the sell button and others followed.  Given the exhausted state of the market from yesterday this is not surprising.  The breadth was +53%. as a few indexes closed in the green.  New highs dropped again to 71.  New lows increased to 52,  Not the numbers of a strong rally.


The futures closed with a red bar, but are still above the 18 SMA.  Will we get a confirmed break of the 18 SMA this time or do we bounce again?


The green count dropped slightly, but the red count increased considerably.  Making a rally high with only 35% of the stocks with green price bars does not instill a lot of confidence in further upside.  It would obviously be easy for the bears to take control on Monday if there is downside follow through.


The latest NAAIM number shot up quite a bit to 56.  Still below the important 60 level.  If the market rolls over they just added fuel for the bears.  It is just short of amazing the sentiment shift.  I read that the II sentiment survey had one of the biggest 4 week changes to the bulls-bears count in this bull market.  The other similar instances were Oct. 2011 and last Oct.  Those rallies were followed by 10% and 5% pullbacks respectively.  The difference this time is we don't have anywhere near the same technical strength those rallies had.  I heard the normally reasonably intelligent Josh Brown on CNBC claim this rally has repaired all the technical damage from the sell off.  Really.  All I can see is bigger divergences then we had to begin with.   Here is a couple of internals to look at.


The NY composite bullish percent chart shows how much lower we are then the other two Oct. rallies with a similar sentiment shift.  The difference between 2011 is very interesting considering the damage at that low was much worse then the current situation.  The comparison to last Oct. is not so dramatic.  Still despite the big bounce the count is barely over 50%.


This is the common stock only advance decline line.  The Oct. 2011 rally had a big surge in breadth that took the indicator above the 200 SMA.  Even though we were not as far away at the lows this indicator is still well below the 200.  It is even negatively divergent over the last couple of weeks. 

This is what fascinates me about the market.  We got an extreme oversold condition and bearish sentiment and people piled back in.  The ensuing rally has now convinced many market participants all is well. The fact is that the things the market was worried about have not been fixed.  Revenue and earnings are still declining.  China is still weak.  They are so weak the PBOC did some easing operations.  Right about now some of you are claiming that is bullish.  I would remind you the FED started cutting rates in Aug. of 2007 before SPX made its final high in Oct.  While that was bullish in the short term in the long term it fell 50%.  The FED was cutting rates all through the 2000 bear market as well.  Easing is not fundamentally bullish unless the economy is improving.  That is not happening at the moment.  Most of what happened was actually nothing but talk and the market rallied on it.  That certainly is not fundamental.  The bottom line is that market internals have not given us any kind of all clear sign.  It certainly is not good that the transports and IWM are lagging so badly.  Some time next month we are very likely to end up below the 200 DMA and people that piled in on this rally will be faced with a decision to hold or fold.  My guess is they will fold because nothing has fundamentally changed.  We are on recession watch in the U.S. and the global economy looks likely to already be in recession.  There are plenty of valid reasons for people to sell.  We will see if they do or not.

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

Bob

Thursday, October 29, 2015

Daily update 10.29

Another odd day.


While SPX was down fractionally IWM was down more then 1% and the SOX was down almost 3%.  The breadth was -60%, certainly not what one would expect on a "flat" day.  New highs dropped to 88 while new lows dipped to 42.  New lows are still way elevated for what we should see on a strong rally.  I heard this was the furthest away from the 50 SMA that we have been since May 2013.  That turned into the so called taper tantrum when Bernanke first mentioned tapering QE.  SPX pulled back to the 100 SMA and started the pattern of 100 SMA bounces that went on for the next couple of years.  This time we are not at new highs.  The 50 is below the 100 which is below the 200 MA.  SPX is massively overbought in a down trend.  With weakening internals on top of it.


The futures were in a very tight range since yesterday's explosion after the FED meeting.  One thing to note is that ADX is up to 36.  That is a very strong trend.  Most of the time that means the first pullback gets bought for a retest of the high.  Be aware that when it does a complete reversal it usually does so with vengeance.  You know how the market likes to catch the majority on the wrong side of the boat.  That happens most often when the current move is against the bigger picture trend.  That is our current situation despite many proclaiming we are still in an uptrend.


The current breadth chart shows how breadth has waned.  Both indicators are barely positive.  A negative breadth day tomorrow would give us a negative cross on both.  The volume lines crossed today.  This looks like exhaustion to me.  We saw that a number of times during the bull market and it could take quite some time before a pullback ensued.  However, in a downtrend the market usually responds much quicker.


The green count dropped under 40 today.  Not much holding SPX up now.  I don't think it can get any weaker and SPX keep going up. 

SPX tested yesterday's high multiple times today and failed to find any buyers up there.  I don't know if it is through testing up there as we have not pulled back yet.  It seems like it could be hard to find buyers up here without more central bank help.  I hope everyone realizes the last leg up was completely central bank propelled.  That is why the internals are diverging so bad.  The buyers are being extremely picky and are concentrating on a few big cap stocks like the Cramer named FANG stocks.  At the same time about 30% of SPX stocks are down 20% or more.  This is exactly how bear markets start.  While we have not seen any sign of it yet I believe there is a bunch of overhead resistance right here.  If the market starts down sellers may come out of the woodwork.  If SPX gets back below the 200 DMA many that bought on this rally are likely to bail and add fuel to the fire.  Lets see if the bulls have any gas left.

Bob

Wednesday, October 28, 2015

Daily update 10/28

The exact opposite of the last FED day.  After the last announcement stocks rallied then sold off into the close.  This time they sold off first then rallied into the close.  Did I mention that the statement might move the market.  Amazing how no actual action can cause such a stir.


SPX makes a higher close confirming the 10/23 break of the 200 SMA.  The one caveat here is that what happens on FED day sometimes reverses over the next 2-3 days.  However, the last meeting saw follow through so maybe this one will also.  New highs came in at 107 while new lows dropped a bit to 56.  SPX is getting really far from that 50 SMA now.  So far no problem though.


The futures stayed outside the Keltner channel and powered higher.  They are really extended from the 100 SMA, but so far nobody cares.


The green count barely crossed the 50 threshold today.  While the breadth was strong this thrust might be lacking in power.  We will just have to see what happens in the next few days.

Commentators read the FED statement as a hike is still possible at the Dec. meeting.  That sent the dollar up strongly along with SPY and sent gold lower.


The FED is threatening to tighten and the ECB is threatening to ease more.  That is very positive for the dollar index as the Euro is the heaviest weight.  Therefore this move makes a lot of sense.  Many of the companies that have reported have basically said the rise in the dollar ate their earnings.  Some companies have said it made a 10% difference.  Theoretically a rising dollar that is bad for earnings ought to be a negative for big cap stocks.  Not so far.  There may be a pause/consolidation here at resistance, but I expect the dollar will get through it this time.  Then it should be on to test the highs.  If that were to play out at some point I would expect a negative effect on SPX.

There theoretically should be lots of overhead resistance in this area on SPX.  However, there has been no sign that is the case.  If nobody sells SPX is going to test the highs.  There will be so many divergences I seriously doubt it will get very far into new high ground.  I have commented a few times how this year reminds me of the 2000 top with IBB playing the role of QQQ.  That top started with the transports topping in 1999 now 2014.  In 2000 SPX and QQQ made their highs in the spring.  SPX retested that high in late Aug. early Sept. while QQQ was much lower.  SPX made a slightly lower high on the retest then fell apart.  We now have SPX testing the highs and IBB considerably lower.  While the charts are not identical to what happened in 2000 they are similar.  I don't think SPX has to make a new high just because we are this close.  Maybe it does and maybe it doesn't.  They always say that it don't matter til it matters.  That is what is going on with the dollar.  We may wake up some day and all of a sudden it matters.  Since I don't have a crystal ball I will have to just take things one day at a time. 

Bob


Tuesday, October 27, 2015

Daily update 10/27 Durable goods

An even stranger day.


SPX tested the 200 SMA from above several times today and held.  The breadth was a very negatve -72%.  Very odd considering SPX was only down .26%.  The transports were down 2.6% while the R2000 was down 1.2%.  New highs contracted to 44 while new lows expanded to 113.  Selling of losers is picking up again.  Strength in big cap drug stocks masked a lot of weakness.  For today the 200 DMA held though.


The narrow trading range continues for now.  No thrust up or break down yet.


The green count slipped below 50% again.  The red count appears to be trending up.  The uptrend is clearly weakening, but the bulls still have the ball for the moment.

There is not so much talk about the FED meeting this time.  I don't think anybody thinks there will be a rate hike.  What they say about the economy might move the market though.  Do they acknowledge the weakness or do they continue to talk like they want to hike rates this year?  Despite them not making a move it might turn out to be an interesting announcement. 

Can SPX get another upside thrust or not?  I don't think the 200 SMA will hold many more days without it.  The internals are really getting droopy.  Watching and waiting at the moment.

The latest durable goods data came out today.  Here is the core and capex YOY charts.


Both of these charts show weakness continues.  The capex chart now at the worst levels of this entire recovery.  ECRI says that 2012 was the weakest non recession in the U.S. ever.  The data shows we are challenging that weakness now.  Can we get lucky and avoid a recession again?  The majority of data in Oct. points to continuing weakness in the U.S. economy.  There is still no sign of a resurgence.

Bob

Monday, October 26, 2015

Daily update 10/26 NAAIM sentiment survey

Odd day.


The COMPX was slightly positive while SPX and the Dow were slightly negative.  At the same time the breadth was -61%.  Strength in big caps held the market up today.  I sure heard a lot of talk about SPX's big break out Friday.  Some people were out upping their year end targets.  Optimism is no longer in short supply.  New highs dropped way down to 65 while new lows came in slightly lower at 50.  Not exactly bullish acting internals.


The range in the futures really contracted.  It makes sense that buyers stepped back with how overbought they are.  The question is will the bears try to take advantage or not.


The 10 DMA breadth lines are getting rather close together.  The breadth thrust has waned considerably.  Will it get another shot in the arm or a negative cross first?  We should know soon.


The green count is barely above 50 now.  Neither the green count or the breadth is particularly strong.  It would not be all that difficult for this market to roll over.  That will happen without another bullish thrust up soon.

At the Oct. low SPX did not quite get all the way down to the Aug. low.  There was no fear in the air as people were just waiting for that retest to pile in.  However, the people that piled in were not the active money managers.  Here is a look at the latest NAAIM survey.

The latest reading of 35 was actually lower then the week before.  We can also see a big difference from how this survey behaved at the Oct. 2014 low.  It shot up over 60 in no time as the big boys piled back in after the Ebola scare was over.  They are clearly much more cautious this time.  That makes me wonder who exactly was piling in on this rally.  Getting over 60 does not necessarily mean the worst is over, but it historically greatly increases the odds a low is in.  We are not even close to that and it seems unlikely they will pile in at these extended prices without good fundamental news.  That has been in short supply on this bounce.  It has all come on bad economic data.  The worse the data the bigger the rally.  At some point you have to wonder if that is a particularly good investment strategy.

We have a FED meeting on Wed.  I don't know if the market will be on hold until after the announcement or not, but it could.  The next important event will be another thrust day to new rally highs confirming a break above the 200 DMA or a close back below that MA.  Everything else is just noise.

Bob

Friday, October 23, 2015

Daily update 10/23 LEI, Kissing 200 SMA good bye, Peter Eliades on CNBC

The PBOC to the rescue with a surprise rate cut in China.  Things must be getting pretty bad out there.


SPX closed above the 200 SMA.  While SPX closed up 1.1% the breadth was only +56%.  Today was very selective.  New highs expanded a little more to 126.  New lows expanded a bit to 57.  That should not happen on such a strong day.  We closed the last remaining downside gap today.  We are back to the scene of the crime as a friend of mine likes to call it.  This is where the break down started and I bet there are quite a few people anxious to sell now that they are back near break even.


The futures are very extended from the 100 SMA.  It seems pretty unlikely they will keep going here.  Even central bank easing probably has its limits.

Here is something a little different.  This is the count of stocks in the NYSE composite index with the 13 EMA above the 34 EMA on the monthly charts.


This is the third time this has dropped below 60 in the last 30 years.  Each time we had a recession.  This indicator bottomed out at 67 after the crash of 87.  We had no recession then.  That is as far as I can go back in the data.  Only in the 2001 recession was it a leading indicator though.  The other two occurrences we were in recession before it triggered.  It is 3 for 3 as a recession indicator with no false positives.  Obviously that is a statistically small sample, but it certainly backs up the economic data that indicates we need to be on recession watch.  The more I look at stuff the more it looks like odds are high we are in a bear market.

Lets look at a couple of market internals.


This is a look at the advance/decline line (green) vs. SPX (blue).  There has been a divergence building for a couple of weeks now.


This one is the cumulative volume index.  It looks very similar to the other one and started diverging at the same time.  So both breadth and volume indicators are showing negative divergences on this rally.  Not bullish.

The dollar extended yesterday's rally with another big gain.  This means it has a confirmed upside break of the 200 SMA.  This looks even more like it has embarked on a test of the high.  New lows now would indicate the basing pattern was a top instead of a bull market correction.  A continued rally would be a nightmare for many CEOs in this country.  It will also be a nightmare for all those foreign companies that borrowed money in dollars.  Kind of ironic when you think about it.  Many traders from 1987 partially blame the crash on a falling dollar.  If we crash now many will be blaming a rising dollar.  Stay tuned on this one.

The market is overbought at the 200 SMA.  For bears this is a dream short set up.  Odds are very high we will have a significant pullback even if we do not make new lows.  A close back below the 200 (2060) will likely bring out the sellers in force.

The Leading Economic Indicator from the conference board is showing some weakness.


In the inset box we can see the LEI has been sideways a couple of months before this month's decline.  This indicator has a history of turning down before a recession hits.  I can't say the economy is going to weaken significantly, but it does not appear the economy is about the get stronger any time soon.   This is a very useful indicator, but to my knowledge it is not freelly available to chart.  I am reliant on somebody publishing the chart which Doug Short happened to do this time.  If anybody knows where this can be looked at in a chart every month please email me.

Great article on the behavior of the market after a prolonged period under the 200 SMA..  The SP-500 200-day average “Goodbye Kiss”  Highly suggested reading.

Interesting interview on CNBC with noted technician Peter Eliades  He discusses a possible top for a decade or longer. 

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

Bob

Thursday, October 22, 2015

Daily update 10/22 How are earnings doing?

Mario Draghi saves the day for the bulls.  He said they need to reevaluate their QE program at the Dec. meeting.  Traders took that to mean there is more easing to come.  The futures shot up before the open on the comments and buyers poured in during the day.


The Draghi commments helped SPX to blast through significant resistance.  It is now spitting distance from the 200 SMA.  That was the biggest volume on an up day since coming off the crash low in Aug.  The breadth was +73%.   New highs popped to 114.  Oddly new lows increased to 54. That is not the only odd thing today.  I will have more on that later.


The futures had a great day.  They even added another 10 points after the 4 PM. close.  I have no idea what that was about.  They just kept rallying right after the close so I don't think it was news related.  It was enough to leave us with a blue bar though.  The last blue bar only caused a pause and not a pullback.  However, we were not over bought at that time.  This one comes just a smidgen below the SPX 200 DMA and an overbought condition.  The risk of a pullback seems a bit higher this time.


Today's strength sent the green count up to 64 and well above the 50 mark.  Of course it is up in the area where most short term tops have been the last few months.  I can't say if anything has changed to make that different now. The red count barely dropped. 

Lets see what Draghi's comments did to the dollar index.


DXY recently suffered an infamous death cross (50 SMA crossing below the 200 SMA).  If one has studied this technical formation a while it becomes obvious that most of the time the low is in for the correction by the time it triggers.  The death cross really indicates it is time to make a decision whether this is a top or just a correction.  Thanks to Draghi's comments the dollar bulls went crazy today.  It crossed back above the 50 and 200 SMAs on a strong thrust bar.  The dollar needs to prove it can stay above those MAs and conquer the key resistance line.  With the rest of the world easing and the FED standing pat I think that could easily happen.  I think this has probably started a move to test the highs from last spring.

Here is a nice summary from Bespoke on the companies that have reported so far.  Top Line Numbers Very Weak This Season

Just over 200 companies have reported earnings since the quarterly reporting period began two Thursdays ago.  As shown below, the percentage of companies beating bottom-line earnings estimates so far has been relatively weak at just 57%.  Below is a look at the historical quarterly earnings beat rate since 1998.  The average over this entire time period has been 62%, so this season’s reading is already 5 percentage points below average.

While the bottom-line EPS beat rate has been weak this season, the top-line revenue beat rate has been downright abysmal. As shown below, just 41.5% of the 212 companies that have reported this season have beaten revenue numbers.  It’s much harder for companies to mess with their numbers to meet top-line numbers than it is to meet bottom-line numbers, and this season’s top-line beat rate is tracking horribly.  There’s still a couple thousand companies left to report, so it’s not a complete picture by any means, but the season is not off to a good start.


So far the revenue beat rate is worse then it was in 2008.  That is after much lowering of estimates.  This number is probably going to improve some as more companies report, but it is going to be decidedly bad.  I heard Bob Pisani say many companies are blaming the dollar for their misses.  If the dollar continues to rally it will only get worse.

What happened today does not make any sense if you think about it.  Both the dollar and SPX up strongly at the same time.  On top of that mid and small caps stocks lagged.  Those groups are much less affected by a rising dollar then the big caps.  My guess is one of those indexes will reverse course in the days ahead.  The news was more fundamentally good for the dollar (more European QE equals weaker Euro) then for U.S. stocks.  I suspect the odds of stocks doing the reversing are higher.

Big volume up days after a long rally often turn out to be buying climaxes.  Today certainly fits the description.  The 200 DMA is now easily in reach so it could be touched before we reverse.  Of course overnight people could completely rethink that strong dollar is good for stocks thing.  After this buying stampede if SPX drops back below 2040 in the days ahead it could ignite a rush to the exits.

Bob

Wednesday, October 21, 2015

Daily update 10/21 IMF warning

Rolling over?


This was the third day in a row SPX got above the 10/16 high of 2033, but failed to stay there.  It looks like major resistance is probably going to win out.  Breadth was -67% so they were selling most everything.  New highs were up slightly to 74, but new lows popped up to 40.  Not good.  SPX closed below the 9/17 high which according to my theory means this rally is over.  Interesting if it turns out that way with yesterday being day 16 of the rally.  That was the same count as the 9/17 high.  The last couple of months might turn out to be nothing but an ABC correction.  If that is the case then we will be seeing new lows eventually. 


The futures closed slightly below the 20 SMA.  We do not have confirmation of a break yet.  However, the DI lines have a negative cross which we did not see the last time the market tried to turn down.  It might be successful this time. 


The red count turned up significantly.  We might get a negative cross tomorrow if we continue down. 

The market got over bought and exhausted right at major resistance.  When you combine that with the low VIX readings this market looks set up to take a tumble.  Everything that has happened since the Aug. mini crash low looks just like a bear market correction.  All fear has been completely replaced by complacency.  I have seen quite a few bears do a flip flop.  I think that will prove to be wrong.  I guess we will see.
 
This is an article on the IMF warning of a possible financial crisis.  $3 trillion corporate credit crunch looms as debtors face day of reckoning, says IMF

Bob

Tuesday, October 20, 2015

Daily update 10/19 This Is Now The Worst Possible Environment For Stock Market Investors

Another sleepy day.


SPX touched the downtrend line and came within one point of key resistance at 2040.  While the major indexes were slightly negative the breadth was +59%.  I guess what selling there was today was largely in biotech and big cap stocks.  New highs were about the same at 64 while new lows dropped a bit to 16.  Not much new there.


The stall continues as the futures trade in a rather tight range.  There is clear resistance in this area.  Will it roll over or bust higher?


The green count turned up a bit today.  However, it is still below 50 and below the 10/16 count.  Crossing back over 50 strongly would likely indicate another upside thrust.  I don't think this was strong enough today to indicate that. 

Today was day 16 of the current rally.  The 9/17 high came on day 16.  When SPX touched 2039 it turned back down rather quickly indicating there was some sellers waiting.  The daily chart has a couple of toppy looking bars at obvious resistance.  The odds of some kind of pullback happening from here seem pretty high.  The key for the downside still looks like a close below 2022 to me.  If we somehow get through 2040-45 then the 200 DMA around 2060 should be the next major resistance level.  What happens may depend on the news flow.  A sell catalyst from here could get the ball rolling downhill again.

This is an interesting article.  This Is Now The Worst Possible Environment For Stock Market Investors

Bob

Monday, October 19, 2015

Daily update 10/19 IP and ECRI coincident index

Nothing like starting the week off with a dull day.


Low volatility dull days are not good things when major indexes are below the 200 MA.  Keep that in mind when so many people are talking about how high we are going into year end.  Breadth was -52% even though most indexes were positive.  New highs came in at 63 similar to where they have been lately.  New lows came in at 24 also similar to their recent numbers.  Buyers were shy as I mentioned on Friday they might be.  The major resistance that lies just above is obvious.  I can't blame them.  It is risky buying here.


The futures show the low volatility extended even through overnight hours of late.  Pretty much stalled for the moment.  Which way will she go?


The green/red bar count chart shows the green count down to 37.  The red count is rising, but slowly so far.  The rally is running out of steam.  To go significantly higher the green count will have to turn back up.  Otherwise this rally is about over.

I am totally and completely amazed at the things I read and hear in the media.  One day Cramer said good news was breaking out all over the place.  I even heard them play the clip again.  One thing is sure his news feed is different then mine.  I believe one of the good news items was that China is no longer crashing.  Is that really good news?  It crashed so much a bounce was inevitable.  It is way too early to say it is done going down though.  I am starting to see a number of articles talking about a year end rally.  The fear is totally gone.  The trouble is we are still below a downward sloping 200 DMA.  Take a look for yourself at SPX and VIX spikes above 30.  The only times you will find the VIX dropping below 20 while SPX is still below its 200 is during the two big bear markets of this century.  It is not normal for just a correction within a bull market.  This condition results in lower lows.  Will it be different this time?

The rally is clearly weakening, but that does not mean it won't hang around another day or two.  Can the bulls push prices up to the key 2040-45 major resistance area.  I would view a close back below the 9/17 high (2022) as a sign this rally is likely over.  Until then lets see what the bulls have.

Here is a look at the latest IP data.

Last month was revised upward a bit.  This month was the second month in a row with a negative reading.  This indicates there was no upside follow through from the spike up a couple of months ago.  The IP is still above last spring's readings, but still not going in the right direction.  It is well below the readings from late last year.  No sign of renewed strength yet.

This chart is of the ECRI growth rate of their U.S. coincident index.


The latest reading was 2.2.  The key number for this data series is 1.5.  Like the IP data we see no sign of improvement in the economy yet.  So far the regional manufacturing surveys this month were negative like last month.  Currently it looks unlikely Oct. is turning things around.  This next chart shows more global trouble.


Source

India has been the strongest of the BRIC economies over the last few years (assuming Chinese GDP does not reflect reality).  With both China and India showing double digit drops in exports the global economy is continuing to worsen.

It is clear the U.S. economy is still in slowdown mode.  Unless the data gets revised drastically downwards we are not in recession yet.  However, the IP data shows the economy is the weakest it has been in this entire recovery.  That makes the U.S. vulnerable to a recession.  With the global economy doing so poorly it may be very difficult for the U.S. to avoid trouble.

Bob


Friday, October 16, 2015

Daily update 10/16 Lace Hunt's Quarterly Review and Outlook

Pushing higher.  Well sort of.  It was actually a mixed day.


Both the bulls and bears took a whack at the market today.  A late afternoon rally did all the work for the bulls.  However, the not insignificant transports were -1.58% on the day.  Breadth came in at +55%.  Not sure that told us much.  New highs came in at 63 which was a new high for this rally.  New lows came in at 23 though.  They are staying higher then one would like for a strong rally.  Major resistance lies ahead at 2040.  The downtrend line from the July high is also just above.  I noticed the 6 month SMA is at 2033 where we stopped today.  Sometimes as price approaches a key level buyers or sellers get a little shy.  2040 is formidable resistance.  They might get a little shy before we get there.


After much struggling today the futures closed above the upper Keltner channel.  The question becomes can they stay there.  At this point this chart could still tip over pretty easy. 


While SPX was positive today the green/red bar chart showed a drop under 50 in the green count.  The rally is thinning out.  It may not be the best thing to be approaching major resistance with a weakening rally. 

It seems likely to me we will get at least a short term top next week if it was not today.  The 2040 level is not likely to get conquered at this time without at least a pullback.  Outside of the strength in breadth I still do not have any indication we have truly made a low.  There certainly is no shortage of people that think so though.  I guess we will see. 

In the latest quarterly review Lacy Hunt takes a look at some of the proposals out there for ways the FED could stimulate the economy.  Quarterly Review and Outlook  It is an interesting read especially for those that think the FED can just print money.

This article probably has more economic data charts then I have ever seen in one article.  Worth a look.  It's time to start talking about a US recession

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.