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Thursday, December 22, 2016

Daily update 12/22 2016 Year-End Bull/Bear Debate

Low volatility continues.

SPX touched the upper channel line.  Sometimes that will spark a little buying.  The breadth was -56%.  New highs dropped way down to 83.  New lows were down just a bit to 18.  Buying enthusiasm is waning as people take off for the holidays.  It makes sense.  Why buy now.  Everybody says nobody wants to sell until next year.  Why not wait until everybody takes their profits next month and then buy.  A pullback in early Jan. seems likely to be a self fulfilling prophecy at this point.  Guess we will see.

The futures got a confirmed break of the 20 SMA overnight.  Selling pressure was minimal though today.  We are still above recent lows.  So far the theory that nobody wants to sell now seems to be working out.

The green count actually turned up a bit today.  It is still below 50 though.  I am not sure if this is meaningful or not.  The narrow range like we have had over the last several days can cause some anomalous readings.  If the market flies up tomorrow we will know it actually meant something.

The 10 DMA lines got a negative cross today.  The MCO is near zero.  If people are sitting around waiting to buy, this condition will sometimes spark another move higher.  I don't know if anybody is sitting around waiting to buy at this time though.

The transports closed back below the break out level again.  This is already the second time that has happened.  The index contacted the 20 SMA today.  Maybe that sparks some stronger buying this time.  Downside follow through and breaking the 20 would  probably not be a good sign.

If there are dip buyers itching to get in then tomorrow could see a round of buying and maybe Dow 20000.  Based on the "why buy now theory"  I don't know if there is many people in that category.

Here is some food for thought for both bulls and bears.  2016 Year-End Bull/Bear Debate


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