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Friday, June 9, 2017

Daily update 6/9 Wall Street Wakes Up to #Carmageddon

Wake up call.

That was a 31 point intraday range.  The price took out the high and low of the last 5 days.  The rotation out of FANG type stocks mentioned two days ago got some legs intraday.  The last 30 minutes saw a big rally off the lows to minimize the damage for the day.  Breadth was +58% as some of that money rotated in non FANG stocks.  Quite a bit of volume.  Pretty odd actually on a day when so many indexes hit new highs.  New highs expanded considerably to 204.  New lows decreased again to 34.  That is still high for hitting new highs in the indexes. 

The futures traded above the upper channel line and below the lower channel line only to settle right in the middle.  I can't remember ever seeing that happen in a single bar before.  Certainly rare.

The green count slipped below 50, but remains above the red line.

QQQ had the highest volume since the China induced mini crash low on 8/24/15.  There is no comparable day in the chart where QQQ was at the high and sold off on such high volume.  Was that a good thing or a bad thing?

The late day rally saved the day for SPY, but we know those moves are not particularly reliable for future direction.  QQQ did not fare so well and ended -2.4%.   We don't have any historical comparison for this.  Nobody knows what will happen next.  Tech has clearly been the market leadership for years.  If the selling continues then the entire market will head down.  The negative divergences I have been talking about for many weeks are still there so more selling is a possibility.  A lot of money piled into the market off the Feb. 2016 low and there are considerable profits on those trades.  It is not hard to imagine some people might want to take some money off the table here.  Next week is going to be interesting.  Either dip buyers rush in and overrun the profit takers or the profit taking spreads.  Don't forget there is likely to be a rate hike on Wed.

I have noted the drop in auto sales in recent months.  Here are some interesting thoughts on the industry.  Wall Street Wakes Up to #Carmageddon

Take a look at this.

If it does not make sense to you try pulling the corners of your eyes back.

Have a great weekend.


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