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Monday, May 16, 2016

Daily uipdate 5/16

Was that a one day wonder on the upside?

The internals were strong like the 5/10 upside explosion.  Volume was similarly light.  The breadth was +72%.  New highs increased to 164.  New lows decreased some to 22.  There was a slight sell off in the last hour that caused SPX to close slightly below Friday's high.  The short term down trend remains intact for now.

The futures crossed above the 50 and 100 SMAs during the day, but the late day selloff put them back below them.  They are still above the 20, but do not have a confirmed break.

The green count crossed slightly above the red line again today.  This chart is back to neutral.

SPX is in a multi week decline.  We have yet to get a good oversold condition.  It would be rare for a decline this long to end without one (remember we are in a primary down trend).  The dip buyers keep coming to the rescue.  They could end up being bear fuel.  That type of action is what prolongs down moves.  People rush in too soon only to get stopped out and add to the selling pressure.  If the bulls can put together a second strong day then maybe we can talk about more upside.

The two main drivers of today's buying spree seemed to be oil up and reports of Buffet and Cooperman buying Apple stock last quarter.  While I do not know much of anything about Cooperman's savvy in tech stocks I know Buffet has always avoided them.  The only other purchase I am aware of was IBM.  It has done poorly since he bought it even though he hypes it up every chance he gets.  Maybe AAPL will work out better for him.  I would not be a buyer myself just because Buffet is.  Icahn and David Tepper just sold all their shares after riding it up for huge gains.  There are thousands of hedge funds that own lots of AAPL stock and might be looking to get out themselves.  It just looks like it is way to early for value investing in AAPL.  At the same time momentum has clearly been broken.  I think AAPL is better for trading then investing at this point in time.


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