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Tuesday, December 29, 2015

Daily update 12/29 Similar to 2011, but different

Buying spree.

Since I already admitted I had no idea which one of two possible patterns was playing out I figured I might as well keep adding.  Now there is a possible little abc upside correction.  Just par for the course in this very choppy year of trading.  The breadth came in at +68%.  New highs expanded to 102.  That is the first time over 100 since 11/4. 

The futures ran up to resistance from 12/17 and stopped.  Its hard to say how significant this resistance is.  There could be a good bit of overhead resistance generally in the area from all year.  Price is getting extended from the 20 SMA and that has often led to a reversal of some kind this year.  Will the bulls keep the pressure on?

The green count sky rocketed to overbought.  This is the highest level since 10/28/14.  It was just 1 point lower on 12/24/14.  The market went up until 12/29, but sold off going into year end.  Hmm.  The breadth data is also showing an extreme overbought situation. 

Only two trading days left.  Will the bulls keep SPX positive for the year?  Will the sellers show up again to sell into the short term overbought condition.  A failure by the bulls here probably will set a negative tone for early next year.  The bulls have to get SPX to a new high.  Anything less then that will not be convincing.

I have seen some people commenting on how SPX is tracing out a very similar pattern to 2011.  While that is true based on price, the internals are different.  Here is a look at how the bullish percent chart looks between now and then.

Notice how the bullish percent dropped as the month went along.  Now look at 2011.

The reading from 2011 was about 10% higher then now and was rising all month.  Not only does the current reading have the wrong trajectory it is the first time it has been under 50 at year end this entire bull market.  The data starts in 2004 and the only other time this indicator was below 50 at year end was 2007 (42.49 for comparison).  Yet another thing that indicates we could be in a bear market.  The evidence continues to mount


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