SPX dropped below the 50 SMA, but dip buyers came to the rescue. It ended well off its low like yesterday. Breadth was -66%. New highs contracted to 24. New lows were high again at 387.
The futures closed below the 100 SMA for the first time since 7/6.
The red count finally crossed above 50. It is still well below oversold levels.
The dip buyers are coming in and picking up the pieces after each sell off. That is preventing the market from getting into a good oversold condition. The market can bottom without that, but with all the weakness in the internals we had at the highs that might not happen here. The TRIN was below 1 both of the last two days. That is no help with making a bottom. I hear plenty of talk about rates being the probleem. However, I am starting to hear some people realizing the situation with China is not likely to be resolved quickly and easily. That could also be causing some of the selling. I would guess there is more to go on the downside. I discussed the channel SPX is in a few times. The move over the top line and quickly back into the channel often results in a move below the lower line. The bulls have some work to do to get control back.
This is an interesting look into China's economic situation by Ed Yardeni. China’s Syndromes
Have a great weekend.
Bob
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