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Friday, December 4, 2015

Daily update 12/4

Pop.  I guess Draghi apologized for not saying he would do whatever it takes yesterday and the market loved it.

SPX recaptured all the moving averages.  Breadth was only +63% which was quite weak for the size of the move.  New highs were up a bit to 45, but that is less then half what they were running before yesterday's big drop.  New lows increased again today to 195.  While today looks good on the surface the internals did not match up.  Possibly nothing but a dead cat bounce.

The futures got back up to the resistance zone once again.  While they closed above the 20 SMA, we do not have a confirmed break yet.  We will find out if resistance is still in play.

We got a positive cross on the green/red bar count chart.  However, we are back at resistance with fewer green bars then when we were here before.  Today's bounce was not as strong as yesterday's sell off.

While I expected we would get some bounce this morning I did not know Draghi was speaking.  The breadth suggests the move was largely index driven.  I think people started buying right from the open figuring he would say something bullish for the market after yesterday's smack down.  They were smart to think of that and rewarded for it.  Unfortunately index driven moves are not reliable as a signal of further strength. Since we are back at resistance the bulls need to prove they have the desire to push prices higher.  Next week we will find out if the bears strike back again. 

Price volatility may be on the rise.  If the market turns down again it might be abnormally volatile for Dec.

The market and sector status pages have been updated.  Have a great weekend.


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