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Friday, July 6, 2018

Daily update 7/6

Bulls take charge.

SPX blasted through resistance this morning on the strength of the employment report.  Breadth was +71%.  New highs spiked up to 137.  New lows slipped a bit to 30.  The volume was light again today.  It will be interesting to see what happens next week when everybody gets back from the beach.

The futures confirmed breaks of the 50 and 100 SMAs.  It is above the upper channel line.  Bottom pattern consummated.

The green count crossed the red line and is above 50. 

The market appears to be in rally mode again.  Trade war fears are taking a back seat for the moment.  Both U.S. and China put on tariffs today.  In this case the market was sell the rumor and buy the news.  SPY has option related resistance at 280.  That happens to be around the June high which is a logical target as noted last night in the blog.  Just keep in mind that more trade war fears could show up again if things start to escalate from here.

I am seeing lots of talk about financial conditions tightening up now.  The FED was confused early on in their hiking cycle because they were raising rates and financials conditions were loosening.  That seems to have changed now.  The strength in the dollar is causing problems in emerging markets.  The global economy continues to slow down some.  The yield curve is still flattening.  Lots of people are starting to worry about that as well.  The financials lagging behind is also being talked about.  There may be enough legitimate worries to keep SPX from making new highs anytime soon. 

Have a great weekend.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.