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Thursday, September 15, 2016

Daily update 9/15 Mauldin articles

Saved by AAPL.

The market bulls seemed to be inspired by the recent rise of AAPL.  This is the second bounce off the 100 SMA.  Breadth was a strong 71%.  New highs perked up a bit to 42.  New lows slipped to 19.  I added a support line at the June high which happened to line up with the 100 SMA.  SPX ended the day right at the Aug. low after selling off.  Will it still provide resistance? 

The futures climbed above the 200 SMA and closed there.  They also bumped into the 20 SMA and turned back down.  That might be resistance. 

The red count came down some today, but is still in oversold territory unlike the last bounce day.  Getting oversold and staying oversold generally is not a good thing.  Turning back down tomorrow could cause a break down of recent support. 

The daily chart may be forming a simple consolidation after the break down from the trading range.  That would imply more downside to come.  The 20 and 50 DMAs are coming together around 2167-8.  A confirmed break on the upside of those MAs might indicate the market is out of trouble.  If the market turns back down tomorrow it would greatly increase the odds we are just consolidating at the lows on the way to lower prices.  A break down here should target the 200 DMA around 2058.  That would be a clear indication the break out to new highs last July had failed.  I would think the ramifications of that would be very important.  However, I am terrible at analyzing human behavior since most of the time it makes no sense to me.

John Mauldin has written some articles on central bankers and their fascination with negative rates that are pretty interesting.  They are a bit long, but I think worth a few extra minutes to read.

Six Ways NIRP Is Economically Negative
Monetary Mountain Madness
Negative Rates Nail Savers


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