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Wednesday, January 24, 2018

Daily update 1/24 Strongest trend ever

Trade war talk and a negative reaction to TXN's earnings put a bit of a damper on the buying today.

SPX traded below yesterday's low, but bounced back in the afternoon.  Breadth was -53%.  New highs were 354 as the market started out strong.  New lows came in at 36.  The transports and small caps were relatively weak today.

The futures penetrated the upper channel line, but bounced to close back above it.  That keeps them in accelerated up move mode for now.

Today the administration imposed some tariffs and said a weak dollar was good.  The dollar comments caught a lot of people by surprise and broke with a long standing tradition of strong dollar talk.  Both actions could upset some of our trading partners.  That may cause an increase in trade war rhetoric.  Hard to say.  While the stock market is ignoring pretty much everything it probably would not like signs of a trade war.  I don't see that happening just yet.  Should the global economy turn down again then things could change.

The market may be running into a few sellers.  Some day the market will go down for more then a few hours.  Until that happens enjoy the ride.

The 'Trendiest' Rally In US Market History

This is truly an unprecedented rally.  Looking at the chart above I see ADX above 50 during a rally has led to some pretty big gains down the road.  When the market does something it has never done before it is pretty hard to have any clue what will happen next.  The market is clearly overdue for some corrective activity, but odds favor higher down the road.


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