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Thursday, April 14, 2016

Daily update 4/14 Sales vs employment

Interesting.  A doji day with the high just a couple of points from the downtrend line.

With the divergences we have that could easily end up being the top.  The breadth was -56% so some profit taking started today.  New highs dropped down to 91.  The divergence in new highs is another yellow flag and the drop back under 100 today certainly shows a loss of momentum. 

The green count dropped considerably today and is back under 50.  Another clear sign of waning momentum.  These indicators make a good pattern for a top.

A doji on negative breadth combined with the divergences in the internals is probably a good warning sign of an impending reversal.  I suspect there there will be some profit taking tomorrow in front of this weekend's Doha oil meeting.  The prior rally high was 2075 so that is the first key number on the downside.  A close back below that means yesterday's break out failed.  The short term trends are still sideways.  An up close tomorrow would turn them up.  I think it is more likely we are about to head down and test the 200 SMA, but we will see.  The bulls seems a little tired here.

This is an almost stunning chart.

Apparently the people getting all those shiny new jobs the government keeps telling us about are not spending any money.  One has to wonder how long this divergence can last.  Some might blame the increased cost of health care insurance for at least part of the problem.  I kind of have to wonder a bit how accurate the jobs reporting is.  This just does not look right to me.


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