Daily update 9/5

A bit of selling and a bit of buying.

SPX tested below its 20 and 50 SMAs, but rallied back above them in the afternoon.  Breadth was -67%.  New highs dropped back to 115.  New lows picked up a bit to 24.  It is not surprising to see some selling given the reports of NK testing another nuke.  The dip buyers showed up in the early afternoon and nibbled away the rest of the day.

The futures nearly touched the lower channel during the morning selling.  At the end of the day they had rallied back above the 20 SMA nearly 15 points off the low.  That is pretty significant.

The green count plunged back near 50.  That alleviates the overbought condition.

The rally appears to be intact.  The test below the 50 DMA and subsequent bounce should indicate the bulls are in control.  If so I would expect them to show up tomorrow and continue this afternoon's bounce.  A close back below the 50 DMA (2453) would be a sign the current rally is probably in trouble.

Bob