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Monday, July 16, 2018

Daily update 7/16 Mauldin: The Debt Train Will Crash

Resistance held for a another day.

SPX tried to go nowhere today and accomplished that very well.  Breadth was -63%.  New highs were 43.  New lows were 50.  Market internals suggest today was weaker then it looked.  SPX has put in six 7-10 day rallies since the Feb. bottom.  Each one ended with a pullback of several days.  Will it be different this time?

The futures closed back inside the channel this morning.  That puts them in consolidation mode.  Each of the previous five rallies ended when the futures came back inside the channel.  I don't see any reason for it to be different this time.  However, until the market rolls over the bulls could keep on buying.

The green count is almost back to 50.  The market has worked off the overbought condition.  The question is whether there will be another big round of buying or not.

The rally has not had a lot of vigor.  The volume has been light and new highs are not particularly strong.  The last two days have been weak with negative breadth.  There were even more new lows then highs today.  The internals appear to be weaker then when we were in this area in June.  There is definitely some risk the market rolls over once again.  The bulls need to get a good solid break out above 2800 and make it stick.  A little patience is needed to let the market decide what it wants to do.

Here is the latest installment from Mauldin.  The Debt Train Will Crash


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