If you would like an email sent to you when I update the blog please send an email with "subscribe" in the subject line to traderbob58@gmail.com. To be removed use "unsubscribe".

Search This Blog or Web

Monday, June 25, 2018

Daily update 6/25 Mauldin: Europe Has Train Wrecks, Too

I guess some people woke up to the trade war.  Others snapped up the bargains late in the day.

SPX sliced down through the 50 DMA and slightly penetrated the 100.  The late day rebound took SPX back above the 50.  Breadth was -73%.  New highs dropped to 36.  New lows spiked up to 105.  As you know I am not a big fan of those late day rebounds.  Listening to the crowd on TV you would think they were a great thing.  The problem is we have been seeing them for months and still SPX has not made new highs.  Are they really a good thing?  We are not getting selling exhaustion.  That makes it harder for the market to bottom.

The futures ran down to the 200 SMA before bouncing strongly into the close.  The -DI line is well over 35 which often leads to a bounce. 

The red count crossed 50, but did not reach oversold levels. 

The SPY option data showed a lot of calls and therefore potential support at 270.  SPY got below that level intraday for a while, but bounced back strongly.  SPX hit its 100 DMA where there could be dip buying interest for a bounce.  How much of a bounce we might get I do not know.  I don't particularly like the looks of XLF, IYT, or DIA in regards to the health of the market.  I don't like the looks of today's bar for a long lasting low.  However, all those things have been going on really for months and we have made several short term bottoms with bars like we had today.  If we don't bounce from here the 200 DMA (2664) would be the next downside target. We could bounce for a day or two then slice right back down through the 100 DMA.  On the other hand, SPX could go back up and retest the recent high.  No crystal ball here.

The market does not like the idea of a trade war.  That is clear.  However, there are still a lot of people that do not believe that will actually happen.  I am not one of those people.  Until it becomes clear one way or the other I think we can expect some ups and downs.  I don't see how SPX marches to new highs unless things clearly settle down on the trade front.

Here is the next article from Mauldin.  Europe Has Train Wrecks, Too


No comments:


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