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Thursday, June 28, 2018

Daily 6/28

Quite the bounce.

It looks like it was mostly a big cap bounce though.  Breadth was only +53%.  New highs were 39 while new lows increased again to 153. There was little interest in selling at the lows which allowed the bulls to take control for the day.  SPX managed to get above the 50 SMA for a bit, but late day selling took it back slightly below it.  The bargain hunters showed up, but the question is what happens tomorrow.

The futures show consolidation for the last three days after the 6/25 sell off.  So far the 200 SMA is holding.  Will the consolidation make a bottom or is it a pause to go lower?

The narrow breadth today indicates the action was mostly short covering and bargain hunting in the big cap stocks.  That is not really a clear sign the market will bottom around here.  It might need to do some more testing.  I don't know if there will be more rebalancing tomorrow or not.  The sellers clearly stepped away today.  They could be back again now that prices have rebounded some.  The 200 DMA is about 50 points lower if SPX does not bottom around here.  That would be the next logical target on the downside.


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