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Tuesday, May 31, 2016

Daily update 5/31

Quiet end of May.

SPX tested Friday's high early in the day and sold off.  It got slightly below Friday's low and bounced back toward the middle of the daily range.  This is not exactly a hanging man bar with the upper wick being quite visible.  However, it is kind of similar and coming after a bounce to a short term overbought condition it might have similar meaning.  A close tomorrow below today's low would be a slight negative.  Breadth was +51% as the market was pretty mixed today.  New highs got over 100 to 105.  That is the best they have been on this bounce.  Still, that is only half of what they were back at the April high. 

The futures may be starting to roll over a bit.  The ADX has turned down indicating the uptrend has ended for now.  Whether we get consolidation to go higher or a reversal remains to be seen.

The green count slipped a bit today.  That would seem to confirm what the futures are saying that the uptrend is over for now and a consolidation/pullback phase has started.

The bull pressure chart is showing negative divergences in all time frames on this retest of the high.  There is a reasonable risk this is a double top forming here.

SPX tested above 2100 today, but found nothing but sellers.  That is easy to understand for me.  Nothing fundamentally has improved since the last time we were here.  One change is the FED is seriously talking about a rate hike at one of the next two meetings.  It seems to me it will be difficult for the market to break out on the upside.


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