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
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