SPX closed right around the upper channel line. Breadth was -65%. New highs dropped down to 113. New lows picked up considerably to 62. That is awful high one day off a new high close. The market was reminded today of the possible implementation of more tariffs on China mid day which sent SPX down a few points.
The futures are just inside the upper channel line. Will they bounce or fall back into the channel.
The green count fell back below 50. Not a great sign one day off a new high close.
Trade headlines are clearly pushing the market around. I don't have any idea how the negotiations are going with Canada. Yesterday there was optimism early in the day. I did not hear anything today. I don't know if it was a good day or not. Trump imposed a deadline for tomorrow, but that seems aimed at rushing Canada into a deal. I don't get the feeling from Trudeau that he will be easily pushed around. This might not be resolved tomorrow. Hard to say. If the market unwinds the optimism over the potential trade deal then SPX will end up back near the Jan. high and we will have to worry about the break out to new highs failing. A failed break out will leave a textbook topping pattern in SPX. It is very important what happens here. This rally back to new highs has not had the same vigor every other rally in this bull market had. Coming off the other corrective lows there was a lot of technical buying strength. That did not happen this time. While the U.S. economy is doing fine the global economy is not. The FED is withdrawing dollars and some emerging market currencies are going haywire. Things could go wrong in the global economy that would certainly affect the U.S. I am trying to be as objective as I can, but I see yellow flags all around. Lets see if the bulls can keep SPX above the Jan. high.
Bob
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