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Wednesday, February 28, 2018

Daily update 2/28

For the first time in a long time there was some serious selling in the month end window dressing.

SPX closed below the 50 SMA, but above the 20.  The breadth was -71%.  New highs dropped way down to 39.  New lows picked up to 117.  

The futures opened up and made a couple of attempts to rally.  However, they got crushed in the afternoon.  They dipped below the 200 SMA briefly at the close, but bounced back in after hours.  This is key support to keep the rally going.  They need to hold here.

The green count slipped quite a bit, but is still slightly above the red line.  Another down day would not be good for bulls.

The high TRIN at the close brought out the dip buyers early in the day.  However, there was some serious selling in the afternoon.  One odd thing was QQQ was positive nearly all day then got hammered in the last 15 minutes.  Apparently there was still considerable derisking to be done.  The first of the month is historically bullish.  The bulls need to get SPX back above the 50 DMA.  SPX is still above the 2/22 close so the last four days have basically been a round trip.  The short term trend is up and the first of the month is historically bullish.  The bulls might show up and try to restart the rally.  I thought we had gotten past the point of a retest of the low, but another down day brings that back into play.  Tomorrow will be interesting.

Powell is back in front of the senate tomorrow.  I listened to his testimony somewhat the other day.  I did not hear the hawkishness the market seems to think was there.  After the last two days there might be some clarifying comments.  We will see.


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