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Tuesday, March 21, 2017

Daily update 3/21


Clearly the market decided it didn't like something.  At least for one day.  Quite a bit of volume behind the sell off.  Breadth was -77%.  New highs came in at 104.  New lows picked up considerably to 52.  SPX came back to the upper channel line it broke out above back in Feb.  That could provide some support.

Last night I mentioned a break of the 50 SMA would probably send the futures down to the 100.  They managed to do that all in one day.  They are currently down a little more after hours.  The -DI line is well above the 35 threshold that opens up the door for a bigger decline.  That is the highest it has been since election night.  Whether the bears choose to step through that open door remains to be seen.  It would not be a surprise with what looks like an exhaustion gap on 3/1 to see a sizable pullback. 

The red line crossed above 50, but remains below the oversold threshold.  The bears are making an attempt to gain control.  The intermediate indicator is still above 50 so the bulls still have a chance at a another save.

The short term lines recrossed today, but the more important thing to note is the cross in the long term lines.  Those lines could do a bounce cross if the bulls start another round of buying.  On the other hand, the bears might be in the process of gaining control for more then just a few days.  We will have to see how the bulls react to today's big move down.

Technically the door is opening up for a bigger correction, but it is too soon to tell if the bears are going to pounce on that opportunity or not.  Further weakness tomorrow would increase the odds for the bears. 

Both SPX and R2000 entered short term downtrends today.  COMPX was actually at an all time high early in the day so it remains neutral despite the magnitude of the sell off.


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