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Monday, June 11, 2018

Daily update 6/11 Mauldin - Debt Clock Ticking

More up, but late day selling.

Today's candle looks like a gravestone doji.  SPX climbed above the March high for a while, but sold off going into the close.  We did not get a new high close for the correction.  The late day selling may be a sign of resistance here.  It would not be surprising.  The question is whether it is stiff enough to kill the rally or not.  Breadth was +53%.  New highs were 138.  New lows were stable at 24.

The futures are still above the upper channel line, but look like they are still losing momentum. 

The green count pushed only slightly higher today.  It remains overbought.

The SPY option data still shows a lot of calls at the 280 strike.  With the market overbought and momentum waning I don't see SPY getting through 280 this week.  It might bump its head on it though.
Getting overbought on the red/green count chart has ended rallies ever since this correction began.  What happens here is very important.  SPX could consolidate/pullback and push higher.  It is also possible it is making a wide lower double top pattern that could be very bearish.  There was lots of optimism on CNBC today.  Apparently it is a done deal that everything is okay and we are going higher.  I don't know if that is the case.  This rally has bothered me from the beginning largely because the bottom formation does not look right.  Then I saw the smart money chart I showed the other day and that reinforced the idea that maybe something isn't quite right.  Historically June is one of the weaker months of the year.  The weakness often happens in the second half of the month.  Even though SPX gapped up and never traded negative on the day the VIX was green all day.  That is rather odd.  In that context the late day selling might make sense.  Maybe we get a pullback here soon.  At the moment I would view a pullback as a buying op.  However, I reserve the right to change my mind depending on how said pullback unfolds.

Here is the next installment of Mauldin's train wreck series.  Debt Clock Ticking


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