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Thursday, February 28, 2019

Daily update 2/28

The bulls and bears are still fighting it out.

There was only an eleven point range today.  That seems extremely narrow without being at a new high.  Breadth was -55%.  Volume increased considerably indicating today was a distribution day.  New highs were 120.  New lows slipped back to 13.  Today is the first red bar SPX has had all year.  That is pretty amazing in itself. 

The futures ended the day just below the 20 SMA.  Will they confirm a break this time or will the dip buyers rush in again?

The red count crossed slightly above the green line.  That is the first time on this rally.  Sometimes that will be enough to bring out the buyers and cause what I call a bounce cross.  I don't know if that will happen this time though.  The pullback so far is miniscule and the market is still very extended above the 50 DMA. 

Internals are weakening without much price damage.  That often means further upside is in store.  However, it is rare to be this overbought without being at new highs.  When the market is really overbought at a lower higher bad things sometimes happen.  In this case the 50 and 100 DMAs are both below the 200.  What I know for sure is that we have clear resistance as intraday bounces are getting sold into.  What I don't know is if that resistance is insurmountable or not.  That probably depends on whether the market starts paying attention to the bad economic data again or not.  Stay tuned.


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