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Wednesday, July 11, 2018

Daily update 7/11

Selling, but no panic.

There was little interest in selling into this morning's gap down.  That allowed the market to bounce a bit.  However, sellers showed up on the bounce and sold bounces the rest of the day.  Breadth was -68% so the selling was broad based.  New highs dropped down to 57.  New lows shot up to 40.

The futures found support at the upper channel line.  Will they bounce from here or end up back inside the channel?

There were enough dip buyers to absorb the selling pressure today.  The question is whether there is a lot more selling to come or not.  I have no idea what happens now.  The chart formation suggested SPX would test its June high.  The move up to test that high was really fast which leaves the market somewhat vulnerable to a reversal.  So we will have to take it day by day and see if trade war fears will continue or if they were just a blip.  Since the futures are still outside the channel if the bulls show up in force tomorrow the rally could continue.


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