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Monday, March 11, 2019

Daily update 3/11

Bulls show up on cue.

The buyers came in right on the open and kept at it all day.  There was absolutely zero selling pressure.  It is very rare to see a big day with such shallow pullbacks.  Breadth was +77%.  New highs expanded to 108.  New lows dropped back to 21.

The futures crossed the 50 SMA.  They have not confirmed a break yet.

The red count dropped back from near oversold levels, but remains above 50.

Is the pullback over?  Is this the start of a new leg higher?  Beats me.  The bulls will need to conquer the recent highs.  I don't really know what sparked the move.  QQQ showed relative strength and so did the SOX.  There was news about NVDA making a big acquisition.  I guess that might have been the match.  I expected a rally this week for option expiration off of the slight oversold condition created last week.  However, I have no idea how far it will go.  This could be some kind of retest of the recent highs before more downside.  I know there was significant resistance around 2815.  The question is whether we had enough of a pullback to get the energy to break through.  I can't answer that question.  There was no selling pressure today at all.  It was not like the sellers were out there and the bulls were powering through.  Will the sellers emerge again when SPX gets back up around 2800?  Good question.  I wish I knew the answer.  What I do know is that we don't have enough information yet to know if this is a meaningful rally or just an oversold rally destined for failure.  Any prognostication would simply be a guess.


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