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Friday, August 18, 2017

Daily update 8/18 How Welfare States Make Us Less Civilized

A little more down, but ...

SPX closed a little bit lower.  Breadth was actually slightly positive.  New highs were 40 while new lows spiked up again to 160.  If you look at the numbers from the 8/8 intraday high we have a nearly perfect ABC pullback to the lower Keltner channel line.  This looks like a bullish setup to me.

The futures did some testing below yesterday's low over night and shortly after the open.  However, the market did not collapse.  It is trying to find a bottom here.

Curiously there was a pretty big drop in the red count.  That is unusual given SPX closed lower.  This is a much better positive divergence then what we had yesterday.

Also curiously QQQ did not close below its 8/10 low.  This is another positive divergence.  It looks like the 50 DMA is trying to hold as support.

The VIX tested slightly above 16, but closed back below 15.  Despite SPX closing lower the internals suggest dip buyers were active.  There are enough positive divergences here this could turn out to be a short term bottom.  SPX has a classic pullback pattern (ABC) into support (lower Keltner channel line).  All that is need is for the bulls to show up on Monday.  I keep wondering if SPX wants to see that 2500 level since we got so close to it.  If the bears show up instead I think we will see the 2400 area pretty quickly.

This is a great thought provoking article.  How Welfare States Make Us Less Civilized

Have a great weekend.


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