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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


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