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Friday, May 20, 2016

Daily update 5/20

The bear market is one year old now.  Not many people that I hear or read are saying we are in a bear.  However, it has been one year since SPX made its all time high.  It also made a new low more then 6 months from that high.  Not to mention we have an actual lower high and lower low.  All that fits my definition of a bear market.  The 20% rule Wall Street uses is idiotic.

The bulls showed up to continue yesterday's rally this morning.  However, the buying peaked before noon.  There was a surge in the last 30 minutes to make the day look better then it probably was.  The breadth was +76%.  They were buying a lot of stocks, but they were not pushing prices up much. New highs were a bit better then yesterday, but were only 44.  New lows dropped back considerably to 18.  That was likely because the market gapped up and never traded below the opening minutes all day.  SPX fell a couple of points short of making it up to the 50 DMA.  I guess the sellers didn't want to wait that long.

The futures hit the 50 SMA and stopped dead in their tracks.  There could be some resistance here.

The red count slipped back under 50, but is still well above the green count.  The bulls once again are keeping this indicator from getting a good over sold condition.  The bears are still in control for the moment.

The market clearly had support in this area this week.  That may have been because of the options that expired today.  I am not sure that support can be counted on next week.  Since the high the daily SPX chart shows mostly three days down then bounce.  The bounces have lasted 1-3 days.  The first bounce that lasts 4 days will change the pattern.  I don't know how long this bounce will last, but the first down day ended the other ones.  I don't see anything yet that looks like an important bottom.  A break down still seems like the higher odds scenario.

The market and sector status pages have been updated.  Have a great weekend.


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