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Tuesday, April 3, 2018

Daily update 4/3

TRIN induced bounce.

The high TRIN mentioned last night brought the dip buyers out this morning.  There was some selling into the strength, but a late day rally took the market above the morning high.  Breadth was +69%.  New highs were a paltry 13.  New lows came in at 87.  The volume was a bit lighter then Friday and well less then yesterday.  This is not a clear bottom pattern yet.

The futures are still below the 20 MA.  The last several days look like a downward sloping consolidation pattern with lower highs and lows.  The bulls will need to break that to get a bounce going.

The red count dropped precipitously.  That alleviates the oversold condition.

We are coming up to earnings season and most comments I have heard expect dynamite earnings. Lets take a look at the GAAP earnings.

Q1 earnings last year were below 95.  By Q4 earnings were over 107.  So comparisons are easy for Q1, but will get more difficult as the year progresses.  I am sure most investors already know this.  It will be interesting to see if the blow out earnings can drive the market higher or not. 

The market is working off the oversold condition in a sideways manner.  I can't remember the last time we saw that.  This bull market has been leaving V bottoms behind most of the time.  There are dip buyers around the 200 DMA, but there is also still quite a bit of supply.  It is not clear we have made any kind of bottom yet.  The bulls need to prove themselves.   


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