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Monday, October 30, 2017

Daily update 10/30 ERCI video on profits growth slowdown

That was a lethargic day after Friday's buying panic.

SPX opened lower and never tested yesterday's high.  Breadth was -58%.  New highs dropped down to 114.  New lows also dropped and came in at 43.  Still elevated.  Volume was lower then Friday, but still running well above average of recent months.  Trading activity has picked up for several days now.  That seems meaningful with the market stalled.

The futures just drifted lower through the day.  No follow through to Friday's buying panic at all.

The red count shot up today and for the first time since Aug. we have a negative crossover.

Both the 10 DMA lines and the McClellan oscillator are negative.

Both the short and intermediate bull pressure lines are negative.  It appears the long term line has peaked.

The short term market internals are all negative now.  Either the bulls show up and start a new leg up or the market will consolidate/pullback here.  It seems to me most people are talking about a melt up into year end so I have to think the odds are higher for sideways to down price action.  I also believe there is very little hedging going on.  If a catalyst comes along that causes some real selling pressure we could see a bigger then 3% pullback.  We had some intense selling pressure on 10/25, but no further sign of it.  FED meeting on Wednesday and AAPL earnings on Thurs. after the close could hold the market up.  After that maybe there is some profit taking.  Still watching for a close below SPX 2565 to indicate Friday was likely a short term buying climax.

After the Feb. 2016 low there seemed to be an underlying bid to the market all the time.  There was a bit of an overhang of sellers going into the election, but the bid was still there which prevented any big pullbacks.  For the last week the NYSE tick behavior appears to be changing.  I think the overhang of sellers is back and the underlying bid seems weaker.  This may be a temporary phenomenon, but I wanted to mention it just in case the market is changing its mood.  We may have hit levels where profit takers are becoming slightly more aggressive while buyers are becoming less so. 

Interesting video of ECRI chief talking about global economic growth peaking and about to slow down based on their long lead indexes.  I remember ECRI saying in the summer of 2016 their long lead indexes pointed to a global economic upturn and they were dead right.  They might be correct again.  Notice in the video he mentions this might be as good as it is going to get.  Key words for a bull market top.  I will start paying attention to the economic data again just in case.  Profits Growth Slows with Economy


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