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Tuesday, January 3, 2017

Daily update 1/3

Dip buyers out today.

The bulls started out the year coming out to play.  Breadth was a solid +73%.  New highs picked up to 143.  New lows dropped way down to 10.  That is where they should be in a bullish market.  SPX closed back above the 20 SMA.  So far so good for bulls.

The futures ended the day just below the 50 SMA.  They got above it at 10 AM, but found some sellers.  The sellers took price down below the prior bar, but the bulls stepped in to stem the decline.  A late day rally pushed the futures well off the intraday low.  Will they conquer the 50 tomorrow?

The red count dropped considerably and ended back below 50.  The bears failed to pounce while the market was a bit weak.

Today turned the short term trend for SPX and R2000 back to neutral as they barely triggered a down trend.  Over the last two years turning the trend down has often brought out buyers.  It looks like it did once again.  The COMPX does not have far to go to turn to neutral as well.  The bulls may seize this opportunity to try for Dow 20000 again.  A reversal again back below the 20 DMA could trigger some selling and a move down to the 50 DMA.  That seems like the lower odds scenario.  The market could see the traditional first of the year inflows this week.  What happens the rest of the month will likely depend on how earnings come in.


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