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Friday, February 15, 2019

Daily update 2/15

More positive comments on a trade deal and more up. 

SPX made some more headway today.  It looks like it might retrace the entire down move from the Dec. high.  It is about another 15 points up to the Dec. high close.  Breadth was +76%.  New highs rose to 109 (still below the Jan. peak, but getting closer).  New lows dropped down to 2.  There could be considerable profit taking when SPX finally rolls over because of the magnitude of the uncorrected move up.

Quite the run up.  Nothing significant to say about this chart until the market does something "wrong".

The green count shot up to overbought again.  So far on this rally that has not meant much.

Bad news is being ignored while positive trade news is being bought.  This makes it likely if an actual trade deal is reached it will be a sell the news event.  The people doing the negotiating keep saying the sides are far apart.  I don't have a clue how that all works out. 

In the mean time the bulls are running with ball.  Until they give it up there is really not much to say.  I have experienced periods where the market seemed to be ignoring fundamental news before.  There always seems to be a day of reckoning.  The trouble is there is no way to know ahead of time when that day will come. 

I am watching ECRI for a turn up in their long lead indexes.  Here is an interesting chart from them.

Their GLMI is their Global Leading Manufacturing Index.  It peaked a little before their IPI which is the Industrial Price Index (based on commodity prices).  Both of those peaked well before the global manufacturing PMIs.  Notice there is still no turn up in the leading index.  The global economic data will not get better until sometime after the leading index turns up.  Something could happen again at any time that reminds the market there are still fundamental issues out there.

Have a great long weekend.


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