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Wednesday, July 5, 2017

Daily update 7/5

Dip buyers still showing up.

There was a little bit of selling pressure out of the gate, but the dip buyers showed up to sweep up all those bargain stocks.  Breadth was -59% as small caps had a down day.  New highs dipped a bit to 90.  New lows crept up some to 29.  Getting a bit elevated again this close to the highs. 

The futures dipped below the 100 SMA shortly after the open.  The selling did not last long before they started grinding higher.  That MA is very clear support.  Eventually the futures will have to launch or they will end up breaking it.

The green count slipped a bit today, but remains above the red line.  Still non committal though.

All bull pressure lines have positive crosses, but none are particularly strong.  There was a distinct drop in buying pressure after March 1.  While there was a burst of selling right after that, the bears have been mostly sitting on their hands since early April. 

The dip buyers came to the rescue on QQQ today.  It was interesting that small caps were in the red all day.  A rotation back to tech from small caps at least for one day.  QQQ found support at the May low.  A bounce here does not necessarily get it out of trouble.  A break below the green line probably creates a bunch of trouble though. 

Upside progress since March 1 has been very slow.  With the VIX this low I see no reason for that to change.  Maybe we need another election to get the VIX up to 20 or so.  There will probably be a lot more traders around tomorrow.  With the futures holding that 100 MA the bounce to new highs scenario for SPX is still in play.  I am not really seeing anything in the QQQ chart to suggest the tech selling is exhausted.  If SPX gets to a new high and rolls over QQQ might still end up breaking down.  Maybe it is nothing, but that QQQ chart looks ugly to me and nobody seems to be talking about it.  I guess we will see what happens.


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