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Monday, September 26, 2016

Daily update 9/26

Downside follow through.

SPX pulled back to test the Aug. low which was resistance after 9/9.  This could be a test of that resistance to give it a chance to be support.  The breadth was -70%.  New highs dropped way down to 53. Volume was pretty light the last two days on this down move.  That can be a good thing or a bad thing.  In a bull market it is generally good as it shows a lack of profit taking.  In a bear market it is a bad thing as it indicates a lack of buyers.  The intraday price pattern clearly looks like a lack of buyers.  Several months ago I noted what felt like an underlying bid in the market after the Feb. low.  That was like a bull market.  The last couple of weeks I am starting to get the feeling that underlying bid may have changed into an overhanging offer.  That would be bear market like.  Something to keep an eye on.

The futures went back down through the 50 SMA, but held right at the 200.  Possible support here.

The green count slipped some more, but is still above the red. 

The bull pressure chart is a bit mixed up.  The short term line are positively crossed (slightly) while the intermediate lines are negatively crossed.  The long term lines are still positive, but are getting pretty close again.

This is a bit mixed up.  SPX has turned its short term trend back to sideways.  However, R2000 and COMPX are still up.  Market internals show the bulls may still be in control in the short term.  Tomorrow could easily come down to the debate tonight.  From listening to people on TV it appears to me there is a pretty strong perception that a Trump election will be bad for the market.  There is has also been a strong consensus on Wall Street that Hillary would win.  If Hillary is perceived to be the winner the bulls probably come out.  If Trump wins the debate it could pressure the market tomorrow.  Ironically based on studies I have seen the more the market goes down between now and the election (when no incumbent is running for president the opposite party tends to win) the higher the odds Trump gets elected.  The market looks vulnerable to a sell off and intraday action clearly acts bearish.  However, there is not enough technical damage at this point to say with any confidence it is a done deal.  The bulls need to show up with some enthusiasm or it will be.


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