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Thursday, April 19, 2018

Daily update 4/19

Pullback day.

SPX traded below the 50 SMA.  It waffled around down there for several hours then rebounded into the close.  Breadth was -67%.  The selling was broad based, but the bears could not keep SPX down below the 50.  New highs contracted to 77 while new lows shot up to 92 (possibly bond related).

The futures dropped down to just above the 20 SMA.  There was a significance bounce off the lows which should be bullish.

The green count slipped out of overbought.  The intermediate indicator is getting ever closer to 50.

I think this was a successful test of the 50 DMA.  A lot of stocks were down, but the market held firm once SPX got below the 50.  The volume was fairly heavy, but the bulls were able to absorb the selling.  Bonds took a pretty good hit.  That may be inflation fear as commodity prices especially oil have been doing well lately.  Generally financial stocks have tended to rally when rates rise.  XLF was up on good volume today.  There might be a make up trade in that sector.  If you like leveraged ETFs then take a peek at FAS.  I don't know if that is going to pop, but it may be worth a watch.  I would consider a close by SPX below today's low (2682) as a warning sign of potential trouble.  Otherwise the bulls have the ball.


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