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Monday, February 8, 2016

Daily update 2/8

Late day bounce made it not look quite so bad.

The late day bounce was not enough to keep the short term trend from turning down.  Breadth was -80%.  The TRIN closed at .99 so no help from that for a bounce tomorrow.  New highs were only slightly lower at 52, but there was a big jump in new lows to 434.  

The futures took a pretty good tumble in the overnight hours with Europe down big.  They did not get down to the Jan. low.  We have an incomplete test at the moment.

The red count crossed the 50 mark, but is not in an oversold condition.  This confirms the short term down trend.

The MCO went negative today.  The 10 DMA lines did not get a negative crossover yet. 

The COMPX closed below its Jan. low and the low from last Aug.  This adds more confirmation that we are in a bear market.

We do not have a short term oversold condition in the market.  The red count and the MCO are confirming the short term downtrend in all three indexes.  Late day bounces like we saw today are not reliable indicators of future direction.  Nothing stands out to me that today will be an important low of any kind.  Now that I said that the market will probably stage a big bounce.  Support below the Jan. low is pretty nebulous.  Things could accelerate again if we keep heading south.

The VIX getting below 20 was a good sell signal.  That may happen again down the road.


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