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Monday, June 4, 2018

Daily update 6/4 The Italian Trigger

The market delivers.

We got the upside break out expected after the false break down last week.  Now the question is will it stick.  Breadth was +62%.  New highs expanded to 161.  New lows came in at 33.  SPX saw its high 15 minutes into the open and traded sideways the rest of the day.  Good breakouts have the tendency to keep going through the day when the gap is not excessive.  The futures only gapped up 8 points from Friday's close.  Not excessive by any means.  Questionable action today.  The bulls will need to do better in the days ahead.

The futures broke out above the upper channel line.  Will they be able to stay there?

This is rather odd.  The green count still has not gotten above the red line.  A strong up day could make a lot of difference.  What happens if we roll over though?

SPX finally closed above the 5/14 high.  It does not appear to be overbought in the short term.  COMPX made a new closing high.  It did not close above its 3/13 intraday high though.  If everything is ok I do not understand why SPX is lagging so far behind.  While the broad market shot higher after last Tuesday's drop XLF still has not made back that loss.  The transports are also acting funny.  They broke out to multi month highs on 5/21, but have gone nowhere since.  They were down today and are below that 5/21 high.  The bulls need to keep on showing up.  Otherwise, the market is at risk of rolling over.  If the market rolls over with the internals already weak the sellers might get more aggressive.  The next few days should tell us if the break out is for real.

This is the next article in Mauldin's train wreck series.  All about Europe.  The Italian Trigger


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