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Friday, June 16, 2017

Daily update 6/16

Dip buyers to the rescue.

SPX tagged the 20 SMA again.  Breadth ended at +54% after being negative most of the day.  New highs expanded a bit to 128.  New lows were stable at 72.  The last couple of weeks look a lot like the pattern that started in the end of April.  Every dip gets bought.

The sellers went to work this morning, but failed to do much damage.  After testing below the 50 SMA the futures bounced back.  The last 30 minutes had a considerable rally.  The futures ended the day like yesterday pretty close to where many bars had closed.  They shot up a few more points after hours.  Looks like the bulls might make another attempt at the highs to me.

The green count slipped below 50, but remains well above the red line.  Dropping below 50 like this will usually bring out the bulls if the rally is to continue.

This kind of looks like a bottom doesn't it.  The volume has diminished the last three days.  It has been 5 days since the tech mini crash and QQQ has not closed below that day's low.  If there was going to be more selling at these levels it seems like it should have happened by now. 

While moves in the last 30 minutes are not particularly reliable for future direction I think this time it will be.  It looks like QQQ is set to bounce which should take the entire market higher.  Bears need to see last Friday's low (2415) broken.  Just because I think we bounce on Monday I don't think it is safe to say QQQ will break out to new highs and continue up.  There has been enough dip buyers to absorb the selling this week.  That does not mean that sellers won't return in force if we get back near the highs.  A lot of people were caught with their pants down.  While they were not anxious to sell into price weakness they might be more willing on strength if price returns to the highs.  If we get the bounce it will be interesting to see how strong it is.  That might tell us if there is still risk of continued selling.

I don't know if this photo is real or not.  However, it reminds me of Wall Street firms and individual investors.  You can decide which one is which.

Have a great weekend.


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