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Wednesday, December 30, 2015

Daily update 12/30

Who hit the sell button?

To hopefully make things clearer I color coded the competing patterns.  Today was not good for the bull case.  Breadth was -69%.  That is awfully high for this time of year.  New highs dropped down to 74.  New lows picked up a little bit to 32.  For three days in a row stocks have followed the overnight price of oil.  Today it was down again like it was two days ago.  Coincidence?  Maybe, maybe not.  The fundamentals are clearly cloudy at best.  Perhaps people are just looking for something for direction and are currently focusing on oil.  With the short attention span of the market that might not last long.  The TRIN was a very high 3.02.  That is usually worth a rally the next morning, but it usually happens when already oversold at least to some degree.  We are just coming off extreme overbought so that does not apply here.  It may be more of a warning then anything else.

Resistance held and repelled the futures at least for the moment.  While they found support at the 100 SMA there was a late day move down to that line.  It is too soon to tell if it will hold or not as there was little time during market hours with price in that area.  We are going to have to see what happens tomorrow.

The green count came in today, but is still overbought.  That does not preclude a rally day tomorrow though.  It just means the bulls have to really want it to push higher from here.  I am not sure they have the desire.

While SPX is still slightly positive for 2015 it closed 17 points below where it closed one year ago on 12/30/14.  Whether we end up with SPX positive or negative for 2015 is probably irrelevant.  Barring a 30 plus point rally tomorrow we will be lower then we were in Dec. of 2014. 

We had a high TRIN today which often brings out the bargain hunters the next morning.  However, we not in the usual oversold condition when that happens.  Since there was late day selling into the close there could be follow through selling in the morning.   Regardless of what happens tomorrow next week is really much more important.  We will have to see if they come back from their New Years parties in a buying or selling mood.


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