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Monday, February 11, 2019

Daily update 2/11

Unenthusiastic bounce attempt.

The market gapped up a bit, but found its high very early.  The rest of the day was very choppy.  Big caps lagged while small caps showed considerable relative strength.  Breadth was +62%.  New highs expanded a bit to 84.  New lows came in at 11.

The futures tested above the 20 SMA, but failed to stay there.  The lack of follow through from Friday's bullish engulfing candle is a missed opportunity by the bulls. 

The green count remains above 50.  The bulls could use to show a little enthusiasm or risk the market rolling.

Big cap stocks lagged today on trade and global economic worries.  There was some rotation into small caps.  It might be tough to get SPX above the 200 DMA unless the bulls get some good news.  Apparently the FED news has run out of stimulus.

It is option expiration week.  I looked at the data, but I did not see any significant support or resistance levels.  I can't remember that ever happening in the time I have been showing that chart on the blog.  That makes me wonder if the option selling activity has diminished because of the higher volatility.  Usually there are a lot of puts under the market, but that is not the case now.  That would seem to indicate there is some nervousness about selling puts at the moment.

I have no idea what happens over the next few days.  News out of DC did not sound good for resolving issues before the Feb. 15 deadline.  Will there be another shutdown?  I keep hearing the sides in the trade negotiations with China are still far apart which is as I expected.  What happens when March 1 rolls around?  The latest global economic data is really weak.  What are the odds that turns around?  It seems like there is enough things to worry about to keep the upside in check.  We will have to watch for a sell catalyst that moves people to take profits from this rally.


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