SPX was up and down today. Breadth ended the day slightly positive. New highs were 62 while new lows came in at 23. The buyers started right out of the gate. After stalling mid day for a while it came out that there was a scheduled vote on the healthcare bill, but they did not have the votes to pass it. That sent the market down to a new low for the current pullback. Then the news hit that the bill had been pulled which sent the market higher. This leaves us with a potential successful test of the 3/22 low. That might embolden some bulls on Monday.
The futures seem to be hugging the 100 SMA. Will they be able to climb back above it?
The counts were stable today. Still no oversold condition. That might be important if we bounce from here.
It would appear that the healthcare bill is off the table for now. From what I understand they were looking to get some savings for the government in that bill so they could do bigger tax cuts. That should mean the cuts won't be as big as was being talked about. Whether that matters to the market or not I cannot say.
We don't have a juicy oversold condition for the bulls to sink their teeth into. However, we do have a possible successful test of the 3/22 low. A bounce is certainly feasible from here. If the market is up Monday morning the buyers might show up to keep it going. Getting this close to the 50 DMA and not touching it is usually problematical. A bounce often ends with SPX rolling over around the 20 DMA. Well, that is when I take a hundred years of history into context. In the context of this particular bull market it is a bit different. Most bounces over the last few years end up at new highs. If the bears show up on Monday the obvious next target down is the 50 DMA (2330).
The next time you see somebody that needs comforting remember even bears need a hug once in a while.
Have a great weekend.
Bob
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