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Tuesday, April 17, 2018

Daily update 4/17 SPY option data

SOX powered through the 50 and 100 DMAs.

SPX closed the 3/22 gap down.  There is some potential for resistance there.  Breadth was strong once again at +68%.  New highs increased a good bit to 112.  New lows were stable at 42.  Up above there is the blue upper channel line, the yellow downtrend line, and the purple upper channel line as possible resistance points. 

The futures sped up overnight and today.  There was very little selling all morning.  Some sellers emerged in the afternoon, but not as strong as we have been seeing.  Maybe there were more bids today (with good earnings news and a bit less geopolitics to worry about) to absorb the selling. 

The green count shot up to the highest it has been since July 2016 when the market was coming off the brexit low.  This could be initiation of a new upside thrust like that was.  However, SPX is still below the downtrend line.  I don't know if it will be able to conquer that or not.  One positive is the intermediate indicator is finally turning up sharply.  It still needs to get across 50, but that is starting to look likely unless we turn down sharply again.

Here is the latest SPY option data.

There are more calls then puts at the 270 strike. That could cause some resistance.  SPY actually got up through the 270.5 level that could have caused acceleration.  It continued a bit higher, but at the end of the day it sold off some.  If it gets above today's high before Friday there could be some delta hedging upside acceleration.  The next level of importance is 275.  That should be much stiffer resistance with the very large number of calls.  That might be too far to go by Friday though.

Everybody seemed quite positive on CNBC today.  I did not note any skeptics.  I don't know if there were any or not. I like the trader interviews, but I don't catch all of them.  There may be some resistance in this area from the gap close and SPY options.  However, good earnings could keep the buyers coming in and maybe SPX powers through.   The technical condition is improving.  One fly in the ointment is that financials are lagging behind.  I think every big name that has reported has ended in the red even though earnings seemed to be pretty good.  Lets take a look at XLF.

Friday it gapped upped considerably on some big bank earnings, but failed to hold it.  It gapped up again today and failed to hold it.  I do not know what the reason is or if it will continue.  I do know that a lot of people watch the financials for the health of the market.  This may not be a problem in the short term, but if the lagging persists it could be down the road.

For now I will be watching SPX's 50 DMA on the downside.  A confirmed break below it could be a sign the market is rolling over.  Will the bulls keep on keeping on?


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