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Monday, March 5, 2018

Daily update 3/5


The bulls decided to build on Friday's reversal.  Breadth was +69%.  New highs were still low at 45.  New lows dropped down to 40.  Volume was decent again.

The futures tested above the 20 SMA, but failed to stay there.  They ended the day at the 200.  This is a possible point of failure for this bounce.  Bulls want to see a confirmed break of the 200 to get the market on a little more solid footing.

Both counts slipped a bit today.  The green line is slightly above the red line.

The bull pressure lines are crossed positive on all time frames.  This is a positive.  However, the crosses are still new and could be reversed easily if we get another bout of selling.

The big move down last week was a news induced move.  Those are often retraced a good bit if not completely.  SPX has made up about half of the move down now.  The futures made it back up to the 200 SMA which could be significant resistance.  Its another 16 points up to SPX's 50 DMA which could provide a point of failure if we get there.  There are a couple of hurdles the market needs to get over to completely retrace the news.  At this point I don't see anything that gives me particular odds one way or the other.  March is usually a bullish month especially when Feb. is down.  With seasonality a tail wind if the news flow permits the market could still rally significantly from here.  All I can say is stay nimble.  The market is clearly in correction mode and therefore somewhat unstable in the short term.


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