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Tuesday, March 14, 2017

Daily update 3/14

The futures headed south right at the European open so no pre FED day gap up.

SPX closed slightly below the 20 SMA.  Breadth was -66%.  New highs dropped a bit to 54.  New lows increased to 69.  That is not particularly good.  I think the break down in oil has put a damper on buying enthusiasm.  So far the selling pressure has been minimal, but I don't know if we can count on that continuing if oil keeps dropping.  I don't know if there is a magic oil price that becomes a problem.

The futures closed below the 50 SMA, but have not confirmed a break yet. 

The red count remains above 50.

The market seems to be losing some steam.  We had a good bounce setup off the 20 DMA, but so far the bulls have failed to pounce on that.  However, the bears have not been anxious to sell yet.  That 3/1 big gap up is looking more and more like an exhaustion gap.  We may have entered some kind of corrective phase.  In Daily update 2/15 McClellan summation index I wrote about the oddly negative summation index with the indexes at new highs.  That never cleared up.  It is entirely possible we are in for a bigger decline then most people expect.  It is also possible 3/1 was the bull market high.  Unfortunately there is no way to know that yet.  I believe a lot will depend on what the economy does.  I am watching it closely.  There will be some important data coming up soon.


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