SPX tapped the 20 SMA and bounced a bit off the low. There was not much selling into the initial gap down. Mid day a few sellers came in, but nothing too dramatic. Breadth was -65%. New highs dropped way down to 64. New lows increased considerably to 87.
The futures tested all the way down to the lower channel line. They bounced considerably. but remain below the 20 SMA.
The red count crossed above the green line slightly. The last time this happened the market bounced.
SPX spent the last several months working back to the highs to close the 1/30 gap down. It seems unlikely to me that it will just sell off hard and leave a gap in the same area. I am guessing that even if the market is getting ready to sell off SPX will make an attempt to close today's gap in the near future. If the market is still looking to buy dips then today's Turkey scare will be nothing but a blip. However, those three days at the high showed there was overhead supply looking to unload on strength. If people are looking for reasons to sell then today's news could spark the expected mid term election pullback. Next week should tells us which it is.
Interesting comparison with 2000. Behold the ‘scariest chart’ for the stock market
This chart seems to be making the rounds. It should not surprise anybody that the market is overvalued.
Have a great weekend.
Bob
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