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Thursday, August 9, 2018

Daily update 8/9

More selling into strength.

Interesting day.  This morning SPX stuck its head above yesterday's high.  The breadth was +61% and I was thinking if SPX was going to run to the high this would be a good opportunity after the two pause days.  Instead of buyers the sellers showed up.  Breadth ended the day slightly negative.  New highs were good at 113.  New lows dropped a bit to 31.  Now we have three toppy looking bars.

The futures came back inside the channel.  A trip to the 20 SMA usually results.

The green count was up a bit, but remains below 50.  The red count also increased.

As I suspected there are some investors looking to derisk their portfolios.  Whether there will be enough buyers to absorb all the selling volume or not remains to be seen.  It might not help that most major world markets are much weaker then the U.S.  I see more people noticing that the global economic data continues to weaken slightly.  That is likely until ECRI's long lead indexes turn back up.  They have not mentioned that yet.  Since May the lumber futures have taken a pretty big drop.  That should be signaling that most of the rebuild from last years natural disasters is coming to an end.  There could be some weakening of U.S. data from that in the next several months.  The mid term election pullback may happen yet.


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