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Thursday, December 28, 2017

Daily update 12/28

A lot of nothing.  Money managers sitting tight.

Very light volume and little movement.  Breadth was +58%.  New highs were stable at 130.  New lows were also stable at 21.  Tech seems to be holding SPX back from climbing higher.

The futures are still below the 20 SMA, but have not confirmed a break. 

The green count turned back up.  A little buying today.

The selling pressure has been light this week, but the bulls have been lacking enthusiasm.  SPX is only 3 points from a new high close.  The bulls ought to be able to manage that tomorrow.  What happens on the first trading day of Jan. will be interesting.

They have been parading lots of bulls on CNBC this week.  When pressed by hosts for what could go wrong they were struggling to think of something.  I have not heard anybody mention the global economy might slow down.  One of the reasons to be bullish mentioned by many guests was global economic growth.  It is possible ECRI's call for growth to slow next year might not come to pass.  What if it does?  From what I can see there will be very few money managers expecting that.  That seems a bit surprising to me.  The FED will be shrinking its balance sheet all year increasing the run off every quarter.  The ECB is cutting its monthly QE buying in half.  Several countries are raising rates.  It is not out of the question that ECRI ends up being right.  That is more likely to be a second half story though.  Any pullback early in the year should be a buying op if the advance/decline is any indication.


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