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Friday, January 11, 2019

Daily update 1/11

SPX has struggled to go up since the VIX dropped below 20.

The market had another small gap down and the dip buyers came swooping in again.  However, they did not push SPX above yesterday's high.  Breadth was weaker, but still positive at +53%.  New highs were 17.  New lows came in at 5.

The futures continue to consolidate at the 100 SMA.

The dip buyers showed up again this morning, but they were not as enthusiastic as yesterday.  I don't think the fact the market has struggled since the VIX dropped below 20 is just a coincidence.  We also have a short term overbought condition as well.  I can understand the hesitancy on the part of the buyers here.  The question in a bear market is can the market consolidate to go higher without rolling over.  That remains to be seen. 

I saw Paul Hickey from Bespoke on TV today.  He said that companies that have announced earnings since the Dec. low were down on average 2% the first trading day after their announcement.  Apparently the market flying up is not helping those that have announced.  That begs the question what happens when earnings season gets started in earnest next week.  What companies say about the future will be very important.  The next few weeks will likely be volatile.

Have a great weekend.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.