Daily update 1/18 NYSE Short Interest Plunges To Lowest In Three Years

Lazy day, but the bulls got a green close.

SPX bounced off the uptrend line today, but remained below the upper line.  Breadth was slightly positive.  New highs dropped again down to 79.  The VIX is up the last two days, but remains rather low.  Price looks like it is coiling to do something.

The green count crossed back above the red, but remains below 50. 

The song remains the same.  The market is in consolidation mode waiting for something.  I am not sure what that something is.  Maybe more earnings reports. 

We are almost to the inauguration.  According to history the market is supposed to have a pullback after that.  I have seen this widely discussed.  That usually means it will be a self fulfilling prophecy or the market will do the opposite.  I have been wondering if the lack of selling pressure so far this year might have to do with the mid Feb. low last year.  People piled in off that low.  Why not wait the year for lower taxes unless something scary comes along to force them out earlier.  We might see more selling pressure in late Feb. or March.

There has been an incredible amount of short covering since the Feb. low. 

This is another sign the bulls are running the bears out of town.  There could be more to go if the short interest drops down to 2012-13 levels.  However, it looks like the bulk of the upside from short covering is over.  Bulls will need to provide most of the fuel to push higher.  Lately they have been a bit reluctant to do that.

Bob