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Monday, November 30, 2015

Daily update 11/30

More often then not the last few years the last day of the month has been negative.  However, it usually gets reversed the next trading day. 

SPX came to rest right on the 20 SMA.  We started with another gap up that found no buyers.  Breadth ended at +54%.  New highs outnumbered new lows 96-58.  This is a bit of an unusual pattern.  Except for today the breadth has been positive every day in this narrow range pattern.  Despite that positive breadth the market could make no headway.  More often in a narrow range there are days with negative breadth and days with positive breadth.  Investors must be avoiding the bigger cap names for some of the smaller ones.  That was very noticeable in the way IWM moved up last week.  Probably the affect of the dollar rally going on.

The futures closed a couple of bars below the 20 SMA.  There was no confirmed break though.  Usually that means they are going to bounce from here.  20 SMA support has caught up to resistance. That should mean resolution of this trading range should be coming very soon.

The first of the month is usually positive so in the absence of bad news we are likely to get a gap up and rally.  When faced with resistance that cannot be beat during regular market hours the bulls have often bid the futures up and over resistance in the night.  That may be needed to clear this very stiff resistance in this area.  If they don't gap it up enough in the morning to get above the recent range it might not keep going.  If the bears unexpectedly show up tomorrow and we get a lower close we could be kicking off a pullback.  The real key on he downside is likely still the 200 DMA (2065)


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