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Monday, August 14, 2017

Daily update 8/14

Bounce initiated.

Friday I mentioned the strength in COMPX supported the bounce scenario.  The futures gapped up and kept on going this morning.  Breadth was +73%.  New highs were 51 while new lows dropped considerably to 53.  SPX easily reclaimed the 50 SMA on the open.  It closed a bit below the 20 SMA.  There is another 15 points to go to a new high close.

The futures got back above the 20 SMA, but still need to confirm a break.  They also need to get back above the 50.

The red count slipped considerably and ended back below 50.  The green count still has some work to do.

The VIX closed at 12.33 well below the 14 level.  If things are still working they way they have all year that should mean SPX hits new highs from here without getting below Thursday's low.  If we break that low instead it would indicate a change in character.  It will be interesting to see how fast the VIX declines should the market continue higher.  On the last rally the market kept going up for days after the VIX closed below 10.  The VIX even got below 9 briefly.  Prior rallies really struggled with a VIX below 9. Lets see what the bulls have in mind.


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