Daily update 9/24

The odds for a down week played out for one day anyway.

SPX closed right near the upper channel line.  Breadth was -66% which was the most negative reading since back in July.  New highs dropped way down to 48.  New lows picked up considerably to 103.  A possible double top forming with that late Aug. high. 

The futures gapped down on the open and eventually tested the 20 SMA.  However, the buyers came in to support the market.  The futures ended the regular session only 3 points below the open.  The selling was not too heavy despite the very negative breadth.

The green count took a hit, but is slightly above the red line. 

XLF broke out to multi month highs last week, but came right back in.  Its looking like a failed break out.

The transports made it above the Jan. high and messed around there for a couple of weeks.  However, they got smacked today and now this is a possible failed break out.

I have lost track of how many times I said this market can't seem to pull itself together to make a sustained move higher.  It still looks that way to me despite the Dow making a slight new high.  It just can't get all cylinders firing at the same time.  One day off an intraday new high in SPX there were 103 new lows.  That kind of thing does not happen in a healthy market.  I imagine the escalation of the trade situation with China contributed to the fall of the transports.  The market has been largely ignoring it, but maybe that won't be the case forever.

The FED meeting on Wed. is expected to bring another rate increase.  The market has struggled after prior hikes for about a month.  I am not sure if that is widely known or not.  If it is known the bulls might not be real ambitious the next two days.

The major indexes have all made it above the Jan. high in the last few months.  However, the market has not really taken off.  If the major indexes all fall back below their Jan. highs we would be left with a serious looking bull market topping pattern.  Even if that were to happen it would not necessarily mean the market would fall out of bed in the near future.  The reason for topping would likely be the global economic situation.  However, the U.S. economy is still going reasonably strong.  The market might not go down all that much until it smells the U.S. economy getting into trouble.  That could still take months.  First things first though.  Lets get through the rate hike and see how the market responds.

Bob