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Monday, November 27, 2017

Daily update 11/27

Friday was up a little as expected.  Today was a lot of nothing outside of a brief sell off mid day.

I believe the sell off was connected to talk of NK doing another missile launch.  The market recovered about half the sell off then went sideways into the close.  Breadth was negative all day despite a little gap up and ended at -60%.  New highs came in at 158.  New lows increased considerably to 44 and remain elevated for new highs.

The futures have been crawling up the upper channel line.  Not much momentum.  They are currently down a couple of points and back inside the channel again.

The green count slipped back below 50, but remains above the red line.  Still not showing a lot of ambition by the bulls.

Market participants lacked enthusiasm to do anything.  Asia and Europe were both down today.  The bond market in China has been throwing fits recently and it seems like it is bleeding over into their stock market now.  The Chinese government seems serious about addressing their problems this time.  Now I understand why they flooded their economy with cash every time things started to go a little haywire the last few years.  They just had their plenum they have every five years in Oct. They wanted to get through that big pow wow without a catastrophe.  With the government set for the next five years it is probably a good time to do the dirty work.  Time will tell.

Besides China the high yield market was causing some angst.  HYG rallied strongly of its 11/15 low, but remains below its 200 DMA.  It also turned down sharply today.  It remains to be seen if it is rolling over though.  It could just be pulling back to make a higher low. 

Everybody seems to be expecting a quiet and bullish end to the year.  Will the market deliver or will China and/or the high yield debt market intervene?  Good question.  Too bad I don't know the answer.


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