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Tuesday, March 29, 2016

Daily update 3/29

If Yellen spoke every day we could easily get SPX to a new high.

SPX is testing the 3/22 intraday high.  Curiously it came up short by .7.  Volume increased a bit, but by no means was today a big rush into stocks.  New highs were a very strong 205.  That is the highest number since March of last year.  It would be very good if new highs stayed in the 200 range in the days ahead, but my guess is that won't happen. 

ADX has gotten very low.  This has the potential for a double top.  Will the bulls keep on pushing or will the bears strike back tomorrow?

The green count crossed back above the red today.  However, it is still below 50.  Once again we have a big divergence.  There is lots of room before getting overbought again, but it might really be showing there is not much support for higher prices.  Interesting situation.

SPX is still well extended from its 50 DMA.  The number of stocks above their 50 DMAs is also extremely high.  That little pullback did not clear the overbought condition.  I kind of doubt there will be enough buying interest to push through resistance here. 

I found these comments from Yellen interesting.

For a time, equity prices were down sharply, oil traded at less than $30 per barrel, and many currencies were depreciating against the dollar. Although prices in these markets have since largely returned to where they stood at the start of the year, in other respects economic and financial conditions remain less favorable than they did back at the time of the December FOMC meeting. In particular, foreign economic growth now seems likely to be weaker this year than previously expected, and earnings expectations have declined.

So markets crapped out and came back, but economic and financial conditions are not as good as they were before markets crapped out.  Global growth and earnings expectations have declined while markets were bouncing back.  Maybe it is just me and my bearish bias, but I am having trouble seeing this situation as being truly bullish.  I guess we will see.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.