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Monday, November 16, 2015

Daily update 11/16

Friday I wrote "We have an extreme short term over sold condition at a potential minor support level.  That could equal a bounce/consolidation early next week."  Some people seemed to be surprised the market was up after the terror in Paris.  If we had not just sold off hard the results might have been different.  I don't know.  The market was primed for a bounce and the bulls delivered.

SPX was so over sold that even with a 1.5% bounce it is still be its 6 SMA.  The breadth came in at +69% about in line with the move up.  New highs were a paltry 15 though.  New lows were down considerably, but were still high at 129. 

The futures got a non blue bar this morning and up and away it went in the afternoon.  The 20 SMA is up about another 10 points.  The 50 SMA is another 24 points up.  I think it might be tough to get much above the 50.  The 20 may stop it, but we were very over sold so we could get through there.

Despite the size of the up day the green count did not make much progress.  That certainly leaves plenty of room for the bounce/consolidation to continue. 

How long this bounce lasts is a difficult question.  SPX might find resistance at the 200 SMA.  There is an open gap from the 11/12 big gap down.  To close that gap SPX would need to get up to the 2075 area which is above the 200.  The 20 SMA is inside the gap at 2072.  This market has been so choppy all year with a lot of about faces.  It has been tough to analyze.  Lets see how far the bulls will take it.


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