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Tuesday, December 6, 2016

Daily update 12/6

Retest of high.

SPX closed above 2210, but was slightly below the prior high close.  It is kissing the uptrend line from the bottom.  Breadth was strong again at +67%.  New highs were 268.  New lows dropped down to 24, but are still a bit elevated for a test of the high.  SPX struggled at 2210 for most of the afternoon.  It had fallen a bit below that, but was saved by a last 30 minute rally.  As we know those last minute moves are not particularly reliable for future direction.  I can't really say we have cleared resistance yet.

The futures are hanging out near the highs.  Overnight volatility was really low.  Technically there is a confirmed break of the 20 SMA. 

The red count slipped some more, but remains above the green.  At least the green count increased today, but not by much.  This is really quite a negative divergence in this chart with the test of the high.  When we got something similar last summer the market stalled.  This looks a bit weaker then that time period. 

The short term bull pressure lines have a positive cross, but the bulls don't have a lot of strength here.  Quite a sizable negative divergence.  We also have the issue that none of the green lines eclipsed the last peak of their corresponding red lines.  Usually that means we will see that last low again. 

The transports are closing in on their high close. Interesting volume the last two days.  Really high volume after a big run does not usually bode well for price.  I guess we will see if that applies this time.

Clearly this post election push up is not as strong as the break out over the summer.  The bull pressure chart suggests this rally is not as strong as the last sell off going into the election was.  Meanwhile sentiment is nearly crazy bullish.   We have had periods of very bullish sentiment matched by strong internals.  We have had divergent internals at highs combined with neutral to bearish sentiment.  This is a bit different then we have seen in this bull market.  Near as I can tell the big shift in sentiment is based totally on hope.  There are many sayings about hope and markets.  None of them particularly good.  We will find out if the hope is justified or not.


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