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Tuesday, July 24, 2018

Daily update 7/24

Selling into strength.

What a day.  SPX gapped up and started higher at first.  However, about 10:30 sellers showed up and put a stop to the rally.  It nearly filled the gap before a late day bounce.  Breadth was slightly negative again.  New highs increased a bit to 93.  New lows came in at 35.  Volume was the highest this month so there was some real participation.

The futures got above the upper channel line again, but came right back in on the next bar.  That often leads to a trip to the lower channel line. 

The green count picked up a bit, but remains below 50. 

This was the most selling pressure we have seen all month.  Maybe it was a Trump tweet that he loves tariffs.  The end result is that instead an upward thrust that could have propelled SPX back to the Jan. high we ended up with a doji bar on negative breadth.  The SOX, IWM and IYT were all down over 1%.  COMPX closed down slightly after being up over 1%.  Once again a sign the market is having trouble getting itself together to make a run higher.  The internals peaked on July 9.  The rest of the run up has come with weakening internals.  That is not usually a good way to retest a prior high.  It does not look to me like SPX is getting ready to break out and run higher.  We will have to watch and see if it rolls over again.  If it does the selling might be worse this time because we got so close to the high.


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