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Wednesday, June 8, 2016

Daily update 6/8

SPX closed above the Nov. high, but slightly below yesterday's high.

Its another 11 points up to the all time high close.  The bulls rushed in this morning to push SPX up to yesterday's high.  The bears did a little selling a couple of times in the morning, but each time SPX dropped below that Nov. high the bulls stepped in.  A good part of the afternoon SPX sat right on top of that high.  The market clearly had an agenda.  The breadth was +63% which was oddly strong for the little bit the market was up.  That continued the pattern of strong breadth on this rally.  New highs increased to 273 and eclipsed the prior rally peak.  Oil was strong overnight which gave the bulls reason to buy.  Oil up, SPX up.  Those two still seem to be in sync.  There was no buying interest today above 2120.  We will see if there is more tomorrow or not.

The futures keep creeping higher.

The price action looks like a slow creep up pattern which is notorious for sharp reversals.  However, breadth is much stronger then normal.  It is clear it is not the big boys piling in.  If that were the case the market would be much higher on the kind breadth numbers we are seeing.  There are a lot of stocks going up a little bit at a time.  If the big boys are buying they are just nibbling a little.  It is possible a lot of the buying is from individual investors.  While many U.S. indexes are above their April peaks that is not the case in many markets around the world.  Just another negative divergence that is present.  Also notably lagging is the transports.  They are nowhere near their high.  Curious.

Lost in the shuffle today was this news from the World Bank.

The World Bank is revising its 2016 global growth forecast down to 2.4 percent from the 2.9 percent pace projected in January. 

That is a huge reduction in economic activity.  Keep in mind these estimates are like the FEDs, always too high.  Weakness from abroad may still keep putting a damper on U.S. economic activity.


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