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Wednesday, September 26, 2018

Daily update 9/26

They first loved the FED announcement, then they rethought things.

The post FED rally took SPX up to fill the 9/24 gap down.  The sellers showed up there in force and sent SPX to new lows.  Breadth was -59%.  New highs were only 60.  New lows came in at 104.  Based on the history previously mentioned a pullback should not be a surprise.

The futures dropped below the 20 SMA, but found support at the 50 SMA and the lower channel line.  Will they bounce or break here?

The red count crossed the green line, but is still below 50.

The stage is set for the bears to take control in the short term.  Will they step up this time?  The selling pressure has been miniscule since the April low.  The internals have been weak for months indicating buying pressure is tepid.  I don't know that necessarily means selling pressure is going to pick though.  On the other hand, I know that mid term election years often have sizable sell offs some time before the election.  If there is follow through selling from today's reversal bar a logical target is the lower channel line.  A slight penetration of that line would be normal since SPX got above the upper line and came right back in.  It did that twice even.  Beyond that we will have to see what happens. 


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