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Wednesday, November 22, 2017

Daily update 11/22

A whole lot of nothing.

Another narrow range day.  Breadth was +53%.  New highs dropped down to 176.  New lows were stable at 27. 

The futures made no progress today.  They were above the upper channel line until after the 4 PM close.  They ended the day back inside the channel which is usually followed by a trip to the lower line.  I am not sure that counts this time since they fell back into the channel after the close.  There will probably not be anybody around to sell on Friday anyway unless there is big overnight news tomorrow night.

The green count dipped a bit today.  The bulls are not exactly tripping over themselves to buy here.

I heard on TV today that tech now has a 25% weighting in SPX.  I don't remember what it was back in 2000, but it was probably fairly close to that.  That could cause some re-balancing for anybody that still believes in having a diversified portfolio.  There is so much money in passive investing these days I don't really know how much re-balancing is done anymore.  It is extremely rare for one sector to get such a significant weighting and it never lasts.

Today did not tell us much about future direction.  It could have been the pause that refreshes or the start of a top.  I still can't say whether the global de-risking is over or not.  While Asia was mostly green, Europe was mostly down and Germany was down over 1%.  The day after Thanksgiving is normally quiet with a slight bullish bias.  However, the global situation may change that this year if the sellers return around the world.  I just don't have any idea exactly what is going on with that yet.  I think it is mostly worries about China, but there is not much talk in the U.S. media.  That may be a legitimate worry given some of the comments we have seen from Chinese officials like the one I showed the other day.  I keep hearing things that make me wonder if China is more serious about addressing their imbalances and bad debt then they have been so far.  That could certainly cause some disruption to their economy and hence the world.  I think this is something we need to keep an eye out for.

I won't be doing an update on Friday.  I will see you all back on Monday.  Have a great Thanksgiving for U.S. readers. 


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