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Thursday, January 18, 2018

Daily udpate 1/18

Today was weaker then it looked.

A bit of a choppy session.  Breadth was -70% despite the indexes only being down a little.  That suggests some rotation into the biggest of the big caps.  New highs were stable at 176.  New lows shot up to 88.  Some of those lows could be bond funds as 5 and 10 year rates made new 52 week highs.  Volume was elevated again despite small sized moves in the major indexes.  Another sign of rotation.

The futures closed back inside the channel.  Usually when they pop out and come right back in like this they end up visiting the lower channel line. 

The green count remains above 50 and below over bought.

The short term bull pressure lines have come together indicating buying pressure has waned recently.  The market needs another shot of buying pressure or it will consolidate or pullback.  The intermediate and long term lines are ok, but are not real strong.  They could go negative fairly quickly if selling pressure enters the market. 

The jury is still out on whether we are making a short term top here at 2800 or not.  The last I heard there was no agreement on keeping the government open.  There is the possibility of a shutdown  The shutdown in 2013 only had a minor impact on the market.  In this case the market is long overdue for a 5% or larger pullback.  A shutdown might act as a catalyst for some profit taking.  I can't imagine it would last long enough to really disrupt things.  I am still watching for a close below 2768 as a clue that a pullback may be starting.


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