A second sizable gap down in a row was met like the first with dip buyers. Even though many indexes were in the red R2000 made a new high. Breadth was +52%. New highs increased a bit to 100. New lows were stable at 77.
The futures tested the lower channel line again and once again they bounced. We still do not have a confirmed break of the 20 SMA. With this many bars that seems unlikely to happen in the near term. The more likely scenario is a bounce back above the 20.
The lines are coming very close together now. This may be close enough to bring out the buyers. They don't always cross before that happens.
There was clear rotation into small caps on the theory they would be less affected by tariffs. However, there was no fear in the air despite back to back big downside gaps. Today's bar on SPX looks like a bullish hammer candle. SPX close fractionally below the low of the key reversal day. It is not enough to be significant. SPX looks more likely to bounce then sell off. I am guessing most investors do not believe the current trade spat will develop into a serious trade war. I don't know that I agree with that assessment, but it could take some time before we know. In the mean time lets see if the bulls decide to continue the rally.
Bob
No comments:
Post a Comment