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Monday, October 17, 2016

Daily update 10/17 Industrial production (IP)

A slow drift down today.

Today was the lowest close since 9/15.  It was fractionally above the 9/14 close.  The breadth was -56%.  New highs were 38 while new lows were 31.  Apparently there was no news worthy of making money managers make any major portfolio moves.  However, the sellers came out a bit on every intraday bounce.  The underlying bid we saw after the Feb. low through summer has clearly turned into an overhang of supply.  Apparently the earnings reports we have had so far has not changed that.  There is still no urgency to sell.  They are patiently waiting for strength at this time.

The futures tried hard not to move very far today.  The moving averages are negatively positioned and are sloping down.  Even the 200 SMA has started to turn down.  The bulls have a little work to do to turn things around.

The red count crept up a bit today, but remains below oversold levels. 

It is clear some investors are selling intraday strength.  Until they start buying the intraday dips again the path of least resistance appears to be down.  Breaking the Sept. SPX low of 2119 might make the sellers get more aggressive.  On the upside SPX needs to get a confirmed break of the 50 DMA.

One of the hosts on CNBC said all the well known investors he has talked to lately have been rather unenthusiastic about the market.  Some are outright worried.  If I have been doing my job that should not come as a surprise to anybody.  There are some serious headwinds out there at the moment.

Today turned the short term trends down across the board.

The latest IP data doesn't really tell us much.

Three of the last four months it has been right around the same area.  This probably could go either way from here.  It is very important which way it goes.  It is well off its high from 2014 so another downturn would not be good.  Bulls want to see this  thing get going on the upside.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.