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Thursday, August 3, 2017

Daily update 8/3 Carmageddon for Hyundai, GM, Chrysler, Ford

More nothing, but internals are weakening.

The narrow range of closes continues.  Breadth was -55%.  New highs slipped to 119 while new lows increased again to 68.  The sub intermediate trend is back to ?+ after only two bars of up.  No upside progress was made.  This is the same pattern that setup just before the 5/17 one day smack down.  That is unlikely to happen again, but some kind of pullback would not be surprising.

The 2475 resistance on the futures held again.  however, the selling did not stop in the 11:00 hour like before.  The futures made a new low after 1:30.  There was a late day spike down to new lows on news, but that was quickly made back up going into the close.  The mid day buying was clearly weaker then the last four days.  Whether that is a sign the dip buyers are slowing down remains to be seen.

There was very little change in the counts today.

For the moment there is clear resistance in this area.  It looks like the bulls need a catalyst to go higher from here.  I am not sure what news would do it since earnings do not seem to be enough.  With the VIX this low it really is no surprise.  The market looks and feels tired and in need of an increase in volatility.  I suspect the early morning selling is coming from Europe.  The rally in the Euro has seriously hurt dollar denominated assets for those folks.  I am surprised they took as much pain as they did before they started selling.  The move up in the Euro is probably getting very near its end.  However, now that they have started selling I don't know that they will stop unless the Euro gets a good bit lower.  Tough to say.  So far people in the states have not really joined in the selling much.  It remains to be seen if it stays that way if the market can't make any upside progress from here.  Closing below 2460 could bring out some sellers.

Auto sales were abysmal once again.  Carmageddon for Hyundai, GM, Chrysler, Ford  I am pretty sure auto sales have not been this bad for so many months without the U.S. already being in recession.  It is amazing that manufactures have not done more production cutbacks.  How much longer can they hold out?


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