SPX headed north mid morning for some unknown reason. With the market going sideways for a couple of weeks I suspect somebody decided to juice the futures to squeeze the shorts. Once that was done they unloaded the futures (at a tidy profit most likely) which started a cascade back down. Breadth was -61%. New highs increased some to 142. New lows also increased to 61.
The futures were real quiet overnight. It was after the market opened that the buying started. I see the futures have hit the lower channel line after hours. Tomorrow is going to be important.
The red line is still below 50, but did turn up a bit today. Still non committal, but the bears are making an attempt to get control.
We have not seen a reversal from new highs in SPX like that in a very long time. The day reminded me of the final high in Oct. 2007. Only then the breadth at the high was much stronger then today and there were a lot more new highs. The breadth today was only +56% at the high. The bulls really didn't have their heart in the up move. So was today meaningful or just another blip on the way higher. Given the weak internals we have had for a while a short term top seems likely. We could be starting the infamous Q3 correction. With the current technical and sentiment backdrop it is also possible this was the bull market top. Time to pay attention to see if the bears come out of the woodwork.
I have heard Roger McNamee interviewed a number of times on CNBC. He is a very smart and forward looking individual. This is a good article. I invested early in Google and Facebook and regret it. I helped create a monster.
Bob
No comments:
Post a Comment