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Friday, May 26, 2017

Daily update 5/26 Don't Blame Minsky If Your Portfolio Value Crumbles


I just want to say that a 4 point intraday price range at this price level is totally and completely ridiculous.  The low volume suggests a lot of people decided to make it a four day weekend.  The breadth was slightly negative.  New highs dropped way down to 154.  New lows dropped a bit to 37.

The futures are still above the upper channel line.

Virtually no change in the red/green counts.  It truly was a nothing day.  That means there was no follow through to yesterday's break out.  Here is a look at the 60 minute intraday futures chart.

Truth be told nothing has happened since 11 AM yesterday.  I would guess that was about how long it took the shorts to cover.  So far there seems to be little interest in either buying or selling the break out.  That is a condition that probably won't last long.

There is a common pattern of SPX having a sell off into June when making a new high in May.  The internals and low VIX would seem to give that scenario pretty high odds of playing out.  If we get that pullback and a decent VIX spike we could easily see new highs over the summer.

Today Bob Pisani was saying that he does not know of anybody that is worried about anything bad happening to the market.  The interesting part was he thought that was a good thing.  Maybe he has never heard that old saying about the wall of worry.  That is the exact kind of stuff that happens at THE top.  Since nobody is worried it likely mean very little hedging.  THAT is something to worry about.  This is an unusual time of year to make such a final high, but not completely without precedent.  Should this be the top I would expect some chopping around through summer with the bigger drop in the fall.

Interesting article sent in by a reader (tnx trip).  Don't Blame Minsky If Your Portfolio Value Crumbles

I think it is well known that a small group of stocks makes up an awful lot of market cap in the U.S.  This chart indicates that we are probably in tech bubble two.

The intermediate trend in SPX turned back to up while the sub intermediate trend in R2000 turned down.

More technology for country folks.

Have a great long weekend.


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