SPX rallied back above the 50 SMA. Breadth was +65%. New highs increased to 78. New lows also increased to 69. The market gapped up a bit this morning and traded sideways until 11:30. Some volume came in and lifted the market. It looked like news of some kind, but I never heard an explanation for it. That buying lasted about 45 minutes then it was sideways to the close. Quite the volume drop today. So far this bounce looks like the dead cat variety. Those can get legs, but it will take some volume coming in.
The rebound in the futures stopped right at the 100 SMA. Since that held as support for several days it makes sense it could be resistance now.
The red count slipped back below 50. but remains above the green line.
The market liked the better then expected employment report this morning as it caused the initial gap up. I am sure that will keep the FED on the hawkish path they have been pursuing lately. I would not be surprised to hear them talking about starting the balance sheet reduction in Sept. and another hike in Dec. When you add all the talk by the FED of over valuation and financial stability it will be amazing if the market takes it all in stride.
I think the current pullback might have more to go. Yesterday and today just don't look like a good bottom to me. Unless some volume comes in on the upside next week I will be watching for a roll over.
I forgot to mention the other day that June auto sales were abysmal again. I have not heard anything about production cuts, but I have to wonder if there won't be more soon unless sales pick up.
Think about this one.
Joe Smith started the day early having set his alarm clock ( MADE IN JAPAN ) for 6 am . While his coffeepot (MADE IN CHINA ) was perking, he shaved with his electric razor ( MADE IN HONG KONG ). He put on a dress shirt ( MADE IN SRI LANKA ), designer jeans ( MADE IN SINGAPORE ) and tennis shoes (MADE IN KOREA ). After cooking his breakfast in his new electric skillet ( MADE IN INDIA ) he sat down with his calculator ( MADE IN MEXICO ) to see how much he could spend today. After setting his watch ( MADE IN TAIWAN ) to the radio (MADE IN INDIA ) he got in his car ( MADE IN GERMANY ) filled it with GAS from Saudi Arabia and continued his search for a good paying AMERICAN JOB . At the end of yet another discouraging and fruitless day checking his Computer (Made In Malaysia ), Joe decided to relax for a while. He put on his sandals (MADE IN BRAZIL ) poured himself a glass of wine ( MADE IN FRANCE.! France !! ) and turned on his TV (MADE IN INDONESIA ), and then wondered why he can't find a good paying job in .. AMERICA .....
Have a great weekend.
Bob
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