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Thursday, June 21, 2018

Daily update 6/21

IWM and QQQ joined the party on the downside at least for one day.

SPX closed below the uptrend line, but above Tuesday's low.  Breadth was -66%.  New highs dropped down to 78.  New lows picked up to 81.  I heard Bob Pisani mention a lot of cyclical stocks were hitting new 52 week lows.  That can't be a good thing especially with the way financials are acting.

The futures closed below the 50 SMA, but have not confirmed a break yet.  We could be in pullback mode now, but some downside follow through is still needed.

The red count climbed to a new pullback high, but is still below 50.  That probably lowers the odds a bit of this being a bounce cross and right back to rally.

I reported this stat back in early June.  Maybe now it is appropriate.
since 1970, the low in June has always been below (or equal to) the close in May.

That makes 2705 as a potential target for this pullback. It just so happens the 100 DMA is at 2704.  Global stocks have sold off much more then the U.S. market has.  However, with QQQ and IWM joining in on the downside the pullback might pick up a bit of steam.  I don't know if this is going to get really ugly or not, but it could.  That second key reversal day near the March high and subsequent sell off opens up the door to the double top lower high pattern.  This one would be much wider then the earlier pattern and potentially much more serious.  Here are a couple of things to watch out for. SPX failing to find support at the 100 DMA and COMPX failing its break out above the March high.  Those events could open up the door for considerably more selling pressure.

I always have trouble figuring out what investors are thinking.  I think they are getting a little more worried about a trade war and the weakening global economy.  I suspect there are grounds to be worried.  Tomorrow will be interesting.  Do dip buyers show up or do sellers keep on going to work?


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.