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Friday, May 19, 2017

Daily update 5/19 The Running of the Bulls’ Mouths

The buying was sparked by a FED head talking about QE.  A late day sell off was sparked by news out of D.C. on the Russian investigation pointing a finger at somebody in the white house.

Unlike yesterday, the rally today was broad.  Breadth ended at +73%.  New highs increased to 92 while new lows dropped to 42.  SPX closed above the 50 SMA.  It remains to be seen if it can stay there.

The futures rallied up and over the 20 and 50 SMAs, but ended the day below them.  This would be a logical place to roll over if they are going to.

The red count took quite a tumble today.  The near oversold condition has been worked off.

Today's rally got SPY into the 5/17 gap down which should be significant resistance on this first test.  The rally slowed down to a grind, but kept pushing a bit higher until late in the day.  The market had turned down a bit before suddenly accelerating to the downside when the D.C. news hit.   This is a logical place for the sellers to show up if they still have inventory to unload.  It seems to me Bullard's comments will be a one day thing.  The Russian investigation on the other hand will go on for a long time.  It seems more likely the sellers will be back on Monday rather then the bulls.  If the bulls can generate a close above today's high it would change the picture.

This article is exactly what I have been saying lately.  The Running of the Bulls’ Mouths.  The author expects the market to tank some day, but that some day is not now and the bull will continue on.  It is truly hard to find anybody that actually believes the bull run might be ending here.  That is common at an actual bull market top.  The market might keep on steaming higher after a bit more correction.  Maybe it won't.  There are bears out there, but they don't seem to be bearish now.  That is why it is time to pay attention just in case this is the real end.

Today turned the SPX intermediate trend to neutral with a positive bias.

More technology for country folks.

Have a great weekend.


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