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Wednesday, July 25, 2018

Daily update 7/25

A late day trade news thrust lit the afterburners.

SPX took off to the upside about 3:30 as a headline hit on EU trade concessions.  Breadth ended up at +59%.  Before the blast off it was yet another weak breadth day at +52%.  New highs were slightly less then yesterday at 87.  New lows were up from yesterday at 52.  SPX got above the low of the 1/26 high close day.  It came within three points of closing the gap from 1/29.  Since 1/29 was an inside day the gap is kind of closed.  The only business left for SPX is to make a new high.

The futures shot up 18 points in the last 30 minutes on the news.  There was to be a press conference about it after the close which I did not see.  The futures opened back up for trading at 6 PM and have given back 12 points from the peak.  I have no idea why.  Maybe the actual news was not as appealing as the headline.

The green count picked up again today and is right at 50.

News induced moves are often retraced.  The futures have already done 2/3 of the retrace.  From today's high it is another 24 points to the all time high.  I am not even going to try to guess what happens now.  The rally since July 9 has been very thin.  The market is going to have to broaden out in order for SPX to break out and make a sustained move higher.  If it does not do that then the move up from July 9 will likely get retraced in the weeks ahead.


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