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Wednesday, November 8, 2017

Daily update 11/8 The Next Crisis Will Reveal How Little Liquidity There Is

I saw this chart in an article explaining why stocks were going to go much higher.  Do you notice anything odd?

SPX makes yet another closing high.

SPX managed to get 5 points below yesterday's close before the dip buyers just couldn't stand it any longer and came in to snap up the bargains.  Breadth was slightly positive.  New highs dropped way down to 120.  New lows picked up again to 77.  Not great internals for a new high.

The futures found support at the 20 SMA overnight.  This afternoon they rallied, but failed to attain a new high.  The futures traded sideways after 1 PM and seemed to find resistance in the 2591-92 area.  They are still there as I write this.  Will they break out above or turn back from here?

The green count remains above the red line, but below 50.  Stuck in neutral.

IWM went down some more this morning, but found some buyers at the 50 SMA. The bounce actually took it slightly above the Oct. low and it stayed there for a while.  However, at the close it slipped back below.  The jury is still out on whether today made a bottom or not.  A close above today's high could prove to be a positive event though. 

While IWM did not continue lower today IYT and XLF did.  The rally in SPX ran out of steam about 1 PM a couple of points below yesterday's high.  Today did not completely follow through on yesterday's action or completely invalidate it.  IWM could be setting up to blast higher or SPX could be setting up for a pullback.  The way the year has gone so far IWM blasting higher could be the higher odds scenario.  With so many people expecting the market to keep melting up into year end it could be a self fulfilling prophecy I suppose.  It is pretty rare the market actually does what nearly everybody expects though.  Maybe this is one of those times.  If IWM, IYT and XLF continue lower I think the picture changes.

An interesting look at how the market has changed and how that might affect how the next crisis unfolds.  The Next Crisis Will Reveal How Little Liquidity There Is

Here is my marked up version of the chart above.

The circled bar is 2017 and clearly we do not have the lowest number of countries in recession ever.  The next four bars are 2018-2021.  Apparently somebody can read the future!  This is another Wall Street lie and a blatant one.  However, I doubt there are many people that noticed.  Did you?


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.