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Thursday, March 15, 2018

Daily update 3/15

Another upside gap sold into.

SPX closed fractionally below the 50 DMA.  Not enough to conclude anything except the bulls are trying to defend this level.  Breadth was -61%.  New highs were 26.  New lows spiked up again to 135.  Not good internals. 

Here is a look at the 10 minute intraday chart of the futures.

Yesterday there was a sharp rally that peaked at 2 PM.  This morning's bounce attempt stopped to the tick of that rally high.  Sellers were apparently sitting there waiting.  When the futures slipped below yesterday's low the dip buyers stepped in.  They kept the market from breaking down today.

On the 480 minute chart the futures tested above the 20 SMA, but failed to stay there.  They still have not confirmed a break off the MA.  Often a consolidation just below the MA like this ends up with price rallying back to the upside.  Usually the rebound happens fairly soon.  If that pattern lasts for too many bars the odds shift to a break down. 

The green count slipped a bit more today, but remains above the red line.

SPY closed at 275.  Check out the current option data.

There are now more puts then calls at the 275 strike.  Both puts and calls have a lot of options relative to the nearby strikes.  This could be what is holding SPY in this area.  Both resistance and support will go away tomorrow. 

All the bull pressure lines got negative crosses today.  The bears are on the edge of getting control.

If the SPY options are controlling price action SPY will probably close nearby tomorrow.  Should we get above 275.5 or below 274.5 then some delta hedging could accelerate the move.  We may not know until Monday whether SPX is going to break down below the 50 DMA or bounce. 


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