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Tuesday, July 5, 2016

Daily update 7/5

That trip above 2100 didn't last long.

The 20 SMA held as support, but SPX closed well below 2100.  Since the Feb. low the market has continued down after the three prior such events.  Will it be different this time or not?  Breadth was a very negative -72%.  New highs dropped way down to 232.  New lows increased to 28 after being well below 10 of late.  Volume was light as once again it appeared investors were not anxious to sell into the morning gap down.  The worries du jour appear to be about Italian banks.  Trouble there is nothing new, but for today I guess it matters. 

The futures bounced off the 100 SMA.  Both the 20 and the 50 MAs are still below the 100.  That makes the market somewhat more vulnerable if we keep going down.  Will the bulls continue the bounce they started this afternoon?

The green count increased a bit today, but remains below 50. 

Both the short and intermediate lines crossed back negative.  The long term remains positive, but not by much. 

I still think it is do or die time for the bulls.  Market internals have deteriorated to the point the market is on thin ice.  The bulls need to strike back tomorrow and get SPX back above 2100.  An up day that closes below 2100 does not help much and may actually end up being a negative depending on how it plays out.  Further downside would make it much harder for the bulls to save the day.


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