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Wednesday, November 28, 2018

Daily update 11/28

The market was struggling until the Powell speech was released.  Investors liked the change in language that interests rates are only a little below neutral now.  That caused a huge round of short covering.  How much of the move was new longs is hard to say.

SPX closed above the 20 SMA.  It remains below the 200 SMA for now.  Breadth was +78%.  Earlier in the day it was -56%.  What a difference the FED can make for one day at least.  New highs were only 44.  New lows were still high at 198. 

The futures spiked up above the 100 SMA.  I noticed a similar bar where the yellow arrow is.  Maybe the result will be different this time.  If the market stalls here and turns back down then maybe not.

The green count crossed above the red line, but remains below 50.  Will this be a bounce cross that brings out sellers or are the bulls ready to get serious?

News induced moves like this are notoriously fickle.  So often the move is completely retraced in the future, but not always right away.  The only thing I am sure about is that a lot of people were cussing out Powell as they covered their shorts.  The first target on the upside would be the200 DMA at 2761.  The 50 DMA at 2781 would be the next target.  Key resistance may still be hiding out at 2800.  If the market rolls over and breaks today's low SPX might test the Oct. low.  In the short term I wish I new whether SPX might want to retrace today's news induced move over the next few days.  I guess we will just have to see what happens.  I don't see anything that says we have a successful test of the low and it is off to the races yet. 


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