That is some V bottom. It is another 70 points to the 200 SMA.
The futures shot up through the 200 SMA. Overshoots of that MA are not uncommon, but the market usually ends up pulling back soon after.
This is an unusually long time for the green count to remain overbought. The last time we had that long a streak was after the Oct. 2014 V bottom. Once the green count fell out of overbought the market consolidated for nearly two months. In that instance SPX was at new highs. This situation is different.
There is not much to say. The market keeps getting some positive headlines to grab on to for buying some stocks. More and more people are becoming convinced the worst is over. Many still expect a retest though. One problem with being driven by the trade headlines is that none of that stuff is real. It is all talk and no substance. Meanwhile the government shutdown continues. We are well past the longest shutdown in history. The longer it goes on the more impact it will have on the economy. The market has ignored that so far because past shutdowns did not cause serious economic disturbance. It appears to me both sides are dug in and have strong support from their political bases. Exactly what will change that? I don't see either side just giving in out of the blue. Something will have to happen to cause a resolution. That could end up being the market tanking again if people decide the economy is truly being impacted.
This is for those that are going to get walloped this weekend.
Have a great weekend.
Bob
No comments:
Post a Comment