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Thursday, February 22, 2018

Daily update 2/22

Another crazy day.

The market gapped up and buyers piled in.  SPX tested the 20 SMA one more time, and once again the sellers showed up in the afternoon.  Four rally failures in a row.  As expected there are some money managers that need to derisk a bit.  Breadth was slightly positive.  New highs dropped way down to 31 despite the rally.  Not a good thing.  New lows were stable at 77.  Also not a good thing. 

The futures confirmed a break of the 20, 50  and 200 SMAs in the night.  However, they started a big rally and were positive by the open.  The rally continued until noon.  The afternoon sell off prevented them from confirming a break above the MAs.  The three MAs are coming into close proximity.  The market should embark on its next move pretty soon.

The green count moved back up a bit, but remains below 50. 

The last four days have seen morning rallies that fizzled in the afternoon.  The last three days the afternoon selling took SPY back below its open.  It probably is mostly retail investors buying in the morning and pros selling in the afternoon.  The question becomes is there enough buyers to handle all the supply.  SPX needs to get a confirmed break of the 20 DMA on the upside to restart the rally.  A close below 2689 probably starts the move down to retest the low.


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