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Monday, September 18, 2017

Daily update 9/18

Missed it by that much (for folks that might remember agent 86). 

Today's high fell just 6 points short of my 2514 target.  SPX found its high early in the day and then sellers started hitting the bids.  Nothing too hard, but they were persistent until late afternoon.  Breadth was +54%, but was +67% early in the day.  Clear selling into strength.  New highs picked up to 168.

The futures are still outside the upper channel and so are still in an accelerated up move (even if it is slow up).  I think we might have hit a more significant resistance level today.

The green count turned down considerably for an up day.  We may be losing some momentum.

QQQ has been unable to make any upside progress the last couple of weeks and was even slightly red today.  The price bars in SPX are like a slow creep up, but the short term internals are much stronger then usual for that pattern.  Apparently a good number of stocks are rising, but by a small amount.  Maybe SPX can reach the target in the next few days.

Wed. is FED day and they are expected to announce the go ahead for the balance sheet reduction.  This is widely known.  However, sometimes even when the FED does exactly what is expected volatility breaks out.  The direction of that volatility is not always what one would expect it to be either.  I don't know if the announcement will be a non event or cause some wild gyrations in the market.  It is likely to cause volatility in the dollar which could move gold around with it..  The rate hikes the FED has done so far have not tightened financial conditions as Yellen has noted.  I think it is important to note that reducing the balance sheet will take money out of the economy.  While the market might not react negatively right away it might at some point down the road.  Time will tell.


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