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Friday, January 12, 2018

Daily update 1/12

More panic buying.  No price is too high I guess.

At this rate SPX will reach 36,000 before long.  Breadth was pretty weak for the size of the up day at +51%.  Yesterday was unusually strong and today was a bit weak.  New highs were the highest since 12/8/16 at 389.  Higher then any day last year!  I think there is a definite possibility we are forming a short term buying climax. 

The futures keep on going.

The green count slipped a bit.  Still very strong.

SPX is now over 11% above the 200 DMA. for the first time since May 2013.  Generally it is difficult for SPX to maintain that for more then 4-6 weeks without a pullback or consolidation.  In 2009 and a couple of times in the 90s SPX was able to maintain that distance for many months.  The March 2000 top was just about this same level above the 200.  Most of the time the market continues higher over the months ahead, but like everything else in the market it is not guaranteed.  I saw a trader interviewed late this afternoon that replied he was ecstatic when asked what he thought about this rally to start the year.  There seems to be a lot of that going around.  It reminded me of a comment Dave Landry made back in 2000 something to the affect he figured the end was near when he could not wait to get up each morning to see how much money he was making that day.  The market is rarely this easy for very long.  We are getting euphoric here.  The market will correct at some point.  Whether that will be sideways or down remains to be seen.

Have a great long weekend.


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