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Friday, April 7, 2017

Daily update 4/7

Another failure for the bulls.

SPX tested above the 20 SMA again, but sold off immediately.  There is only 14 points between the 20 and 50 DMAs now.  Time for a decision soon.  Breadth was -51%.  New highs were steady at 70.  New lows actually dropped a bit to 11.  Buyers and sellers were taking turns again today.

The futures stopped dead at the 100 SMA like yesterday.  Not much change in the daily red/green chart so showing the weekly version tonight.

The weekly chart is showing a negative crossover for the first since the election.   Something I just noticed tonight when I was getting the chart ready involves the green line and the overbought red line.  The yellow circle represents the only rally between 2009 and 2015 that did not make the overbought line.  Since the start of 2015 the rally off the Feb. 2016 low is the only rally to achieve that feat.  There is clearly less buying enthusiasm off the lows.  That happens to correspond with the end of QE3.  Is that just a coincidence?  I keep thinking the FED talking about balance sheet reduction could easily reduce buying enthusiasm even more.

The short term lines crossed negative.  The intermediate lines recrossed green a few days ago.  The long term lines remain red.  With all the lines near 50 the buying and selling pressure on all time frames is pretty even at the moment.  That condition does not usually last very long.

Everything seems to point to a resolution to this consolidation fairly soon.  Since the 4/5 big reversal the 20 DMA has been rock solid resistance on SPX.  Sellers showed up very quickly when that line was reached.  That suggests the resolution has higher odds of being down doesn't it?  I think we will find out next week.

Here is a new series to lighten up your weekend.  It is called technology for country folks.

Have a great weekend all.


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