If you would like an email sent to you when I update the blog please send an email with "subscribe" in the subject line to traderbob58@gmail.com. To be removed use "unsubscribe".

Search This Blog or Web

Monday, October 3, 2016

Daily update 10/3

Sleepy for a first day of the month.  Apparently the usual first day inflows were not particularly strong.

SPX was stuck between the 20 SMA below and the 50 SMA above today.  Breadth was -56%.  New highs dropped way down to 69.  On the negative side, the pattern of making the high early in the day and the low after noon repeated today.  On the positive, side the bulls defended Friday's low and pushed prices back higher a bit.  Not very bullish intraday price action though.

I adjusted the lower trendline on the futures to try to better capture the price action.  The market seems afraid to leave the confines of that nice comfortable triangle.

Both the green and the red counts increased some today, but both remain below 50.

The short term bull pressure lines crossed negatively today.  That makes the short and intermediate negative and the long term lines very close together.  The underlying buying power has waned considerably like it did back in June.  The brexit vote provided another wave of buying.  Will the upcoming earnings season be a catalyst for buying or selling?

The Aug. monthly doji bar was followed up by a Sept. doji bar.  Talk about indecision.  SPX broke out to a new all time high, but investors are having trouble figuring out whether they should buy it or not.  The market isn't going to sit still forever so maybe this earnings season will be the determining factor.  Back in the spring Q3 earnings were supposed to be up several percent, but estimates have come down as they usually do.  Will the companies beat by enough to justify higher prices?

If the monthly indecision is not enough, the triangle on the futures suggests indecision at the micro level as well.  If the market breaks out on the upside then I would expect a slow grind higher.  Since most investors expect an up market into year end a downside break could be bigger then most people think.  On Friday afternoon they were talking about the FED buying stocks on CNBC.  One of the hosts theorized that the market would never sell off hard again to provide Warren Buffet type buying opportunities.  This is yet another sign of the complacency so many people are showing.  I have a hard time believing the stock market will never, ever have a big move down ever again.  Count me as a skeptic in that category.

Both R2000 and COMPX turned their short term trends neutral today.


No comments:


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