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Thursday, February 4, 2016

Daily update 2/4 Factory orders

Bulls still struggling.

SPX managed a slight gain.  It looks like we have resistance at 1915 and support at 1875.  Volume was high again today. There is participation even if we didn't get very far.  The breadth was a strong +62%.  That is pretty strong considering the meager move in the major indexes.  There was considerable strength in basic materials, transports, and the SOX.  New highs dropped considerably to 53.  New lows also dropped, but outpaced new highs coming in at 66.  I am not quite sure what to make of today.

The futures ended the day just above the 20 SMA.  They are trading just below it at the time of this writing.  More pokes below that line today.  This chart looks heavy doesn't it?  If the bulls don't get a lift going and soon this seems likely to cave in. 

The green count continues to hold in there.  There is clear lack of progress despite a strong green count.  The breadth indicators are also strong.

This looks like what I call the invisible hand at work.  That is when internals are strong and price does not move up or they are weak and price does not drop.  This condition usually results in a big move in the other direction.  If we have already seen the peak of this bounce it could be a long way down to the next short term bottom.  All we are doing is burning off the oversold condition.  The rally off the Aug. mini crash failed to make new highs in most indexes, but at least it was a strong rally.  So far this looks rather wimpy.

The latest factory orders data came in this morning.

There is still nothing positive going on with new orders.  They remain negative YOY.  Nothing more to say.


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