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Monday, August 28, 2017

Daily update 8/28

Another failed attempt to rally above resistance overnight.

Pretty clear consolidation forming below the 50 SMA.  Those usually break to the downside just like consolidations on top of the 50 usually go up.  Can the volume get any lighter?  Breadth was -51%.  New highs dropped a bit to 89 while new lows picked up a bit to 55. 

The futures dropped down to the 200 EMA overnight, but found support again.  By the open they were above the 2446 resistance level, but started selling off right away.  The selling was not particularly hard.  Just enough to push the market down some.  The low hit mid day and the futures rallied slowly in the afternoon.

The green count picked up a bit, but remains below 50.

There are an awful lot of big red volume bars in QQQ.  Especially considering it is this close to the high.  Hard not see that as mass distribution.  Last week the selling in QQQ picked up when it crossed above 143.  It did not get that high today and the selling was rather muted.  Closing above 143 could be a positive sign for the rest of the market.  However, if it gets up there again this week it might get whacked.

I suspect it will take a very bullish news event to break the market out on the upside.  If that does not come along odds favor a break down to new lows.  Obviously earnings were not enough to drive us higher.  What will?  How long we consolidate here is anybody's guess.  There is clearly an increased supply of stock for sale now.  However, there has been plenty of dip buyers as well.  One side will eventually run out.

Sometimes mother nature shows us puny humans who is boss.  My heart goes out to all those affected by Harvey.  What a disaster that just won't end.  Tragic.


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