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Tuesday, January 22, 2019

Daily update 1/22

This is the first time people sold into a gap down since the Dec. low.

SPX tested below the 50 SMA, but bounced strongly going into the close.  More on that later.  Breadth was -75%.  New highs were 16.  New lows picked up to 28.  More new lows then new highs already is not a good sign for bulls.

The futures dipped below the 20 SMA, but held for now.  They are right at that MA as I write this.  I mentioned on Friday the 200 SMA was likely to be a problem in the short term.  This is likely to be the start of a consolidation/pullback.

The green count finally fell out of overbought territory. 

The rest of the world was down overnight which caused a gap down in the U.S.  Sometime during the day there was a headline that some mid level Chinese trade negotiators cancelled a trip to the U.S.  That brought out significantly more selling.  In the last hour Kudlow was on CNBC saying there was never any meeting scheduled so there was no cancellation.  Fake news!  That caused a screaming rally into the close.  This is the kind of day that can end a bear market rally.  We will have to pay close attention now and see how the price action unfolds.  If the bulls come out in force tomorrow they can still salvage the rally.  A close back below the 50 DMA could be trouble though. 


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