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Friday, February 24, 2017

Daily update 2/24

SPX makes a slight new closing high.

The dip buyers came out early on to take advantage of the gap down.  No market is too extended to buy.  Even though we got a new high close breadth was slightly negative.  New highs dropped way down to 111.  Most of the buying came in that last 35 minutes in a ramp up into the close.  Those end of day moves are not all that reliable for future direction.

Last  night I wrote this about the futures.  "However, they ended the day back inside the channel.  That could mean the run is over for now unless the bulls show up in the morning and send the market higher."  The bulls did indeed show up this morning and they did push the market higher.  However, that push was not exactly the strongest one we have seen.  The futures are actually still inside the channel.  That means the bulls need to show up again on Monday to keep the upside pressure going.

The green line dipped quite a bit today, but remains above 50.  With SPX at a new high close this could be construed as a possible negative divergence.  However, the bulls sometimes start buying again in the mid point area.  Another thrust up on Monday would not be a surprise with FOMO running so high.  This last move up was sparked by DJT saying a phenomenal tax package was coming soon.  Having watched the goings on in D.C. for a lot of years it strikes as a bit hard to believe that this tax thing will be all wrapped up in a pretty package any time soon.  There might be at least a little risk the market gets disappointed at some point with the progress or with the details.  While the market seems to be running on fumes it is impossible to say how long those fumes might last.


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