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Wednesday, May 24, 2017

Daily update 5/24 Bear capitulation continues

SPX makes a new high close, but it never got above the 5/16 high.

For most of the day SPX had a 3 point range between 2398 and 2401.  After the FED meeting minutes were released a few buyers stepped in to get that new high close.  However, the market truly lacks energy.  Breadth was +54%.  New highs were down from yesterday at 125.  New lows increased for the second day in a row to 33.  That is elevated for a new high close.

The futures ended the day slightly above the upper channel line.  Will they stay there and accelerate higher or fall back? 

The green count shot up a bit today, but remains below 50.  Still not particularly good for a new high close.

All three time frames on the bull pressure chart have positive crossovers.  However, none of them are showing any real strength.  The short term indicator has actually turned down a bit.  I don't think it is safe to conclude the market is going higher from here.

The market still looks very tired.  It took fairly dovish FED meeting minutes to get the push to new highs.  Of course the trouble is that most news events like that get retraced.  The market looks like it needs a pullback.

Under the radar there is talk about banking and bond market problems in China.  It sounds similar to what happened in the U.S. in 2007.  I don't know if that will blow up and become a global problem or not.  However, China is the second largest economy in the world these days.  Should things get out of control there it is hard to imagine the global economy going completely unscathed.


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