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Thursday, January 10, 2019

Daily update 1/10

Several FED speakers talking about a pause in the rate hike campaign spurred some more buying.

SPX closed 1 point above yesterdays high.  I can't say that is enough to indicate we have cleared the resistance that has been visible in the intraday action.  Breadth was +59%.  New highs were 13.  New lows dropped down to 6.

The futures bumped into the 100 SMA again at the end of the day.  They are down a few points as I write this.

The green count is super overbought now. 

There was some poor earnings news today that seemed to be ignored by the broad market.  I believe that was because of all the FED speakers in the last few days making it clear they are pausing.  The question is whether that has all been discounted yet or not.  I think it is very near if not done.  My tick indicator I use intraday was showing a hint of distribution today for the first time since the Dec. low.  One indication the rally may be running out of steam.  We will have to see what happens tomorrow.  A close below today's low in the days ahead could bring out some sellers.

As I suspected some people are jumping on the strong breadth as an indication there is nothing to worry about.  Even if the market retests the low everything will be all right they say.  I can understand that.  I had a lot of problems with the strong breadth data in the 2000-02 bear market.  I got confused a number of times as to what was going on.  I am not going to let that happen again.  We are in a confirmed bear market.  Breadth works differently now.  Rallies on strong breadth are good for shorting when they roll over.  Let others be confused and over stay their long trades.  Be nimble or be out of the market.  Buy the dip, sell the rip and don't be the last long to get out.  This bear is not going to end until sometime after the majority of investors realize it is a bear market.  There are very few in the bear market camp at this time.


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