A doji price bar signals the bulls and bears fought to a draw. It was a bit of an odd day. After gapping up the market went sideways for a few minutes. It suddenly spiked up to new highs. Then sellers showed up and pushed SPX down considerably (relative to the low volatility we have been seeing). Meanwhile TLT was rising. After the selling abated, SPX rallied off the lows and TLT pulled back from its high. It looked like somebody was doing a portfolio adjustment from stocks to bonds. I can't recall seeing that type of move much of late. Breadth was +62% which was pretty strong given the little bit the indexes were up. Broad based buying, but only a little nibbling. That could be the work of retail investors.
The green count picked up a bit and remains above 50.
The was clearly some resistance this morning, but I can't say whether it was anything more then a one time portfolio adjustment. The dip buyers showed up to contain the selling. Recently the Bank of America chief investment strategist Michael Hartnett wrote "best reason to be bearish is...there is no reason to be bearish." I think that seems to be the general consensus these days. Looking at SPX it seems pullbacks have been outlawed. In the book "Why Stock Markets Crash: Critical Events in Complex Financial Systems" Didier Sornette wrote about bubbles. He noted the typical pattern going into a bubble top is one of ever smaller pullbacks. Hyman Minsky wrote about how stability breads instability in financial systems. Volatility is at all time historical lows. Pullbacks have become non existent. There is not a market bear to be found. Some day this will end and it could end sharply. I just don't know if that is close in time or months from now. For now I am still watching for a close below 2540 on SPX as a clue a pullback might possibly be starting.
Bob
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