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Monday, May 7, 2018

Daily update 5/7

Indecision as SPY makes a doji bar.

The market opened up and continued the rally for about 30 minutes.  It traded sideways until late afternoon when SPX popped its head up above the 4/30 key reversal day high and the 50 SMA.  That was met with sellers and SPX backed off considerably.  Volume was light once again.  Breadth was +60%.  New highs expanded to 113.  New lows dropped a bit to 55. 

The futures confirmed a break of the 50 SMA in the night.  After some further upside during the day they slid back to the 50.  They are still above it at the moment.  Will they be able to push off that line tomorrow and make more upside progress or fall back through it?

The red count turned higher and the green count turned lower despite SPX being up .35% today.  That strikes me as pretty odd.  With SPX coming off the 200 DMA the bulls would like to see a sign of strength.

The people on CNBC said the late day pullback on news that DT is supposed to announce his decision on the Iran deal tomorrow around 2 PM caused the sell off.  I can't say.  The pop up over the 50 DMA happened just a few minutes before the news broke.  The market sold back off a little bit in front of the news.  So it is hard to say.  At any rate we have a possible failure at the 50 DMA.  I don't see any clear sign the market has put in a bottom.  The bulls need to prove themselves.  I think patience is needed here.


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