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Friday, March 22, 2019

Daily update 3/22

Buyers remorse?


The sellers wiped out yesterday's gains in the first 30 minutes of trading.  Breadth was -79%.  New highs were 155.  New lows picked up to 49.  SPX dropped back below the highs from last fall. Technically you might call this a failed new high.  It is still above 2800 at the moment though. 


The futures fell back to the 50 SMA.  A logical spot to bounce from.


The weekly chart shows SPX getting up to the upper Keltner channel line.  This is potential resistance.  That is a pretty clear reversal bar this week.  Will there be downside follow through next week?

The talk of green shoots I have been hearing lately was wiped out by abysmal data from Europe today.  How many times have I commented how the market was ignoring some really poor economic data.  It finally woke up for one day at least.  The question is whether the market decides to forget the bad stuff again or not.  All I know is that the bad stuff is getting pretty bad and there is no sign of a turn up yet despite what people are saying. 

The bears need to see SPX close below 2800.  The bulls need to see a rebound on Monday that sticks all week.

More poor economic data from Europe.

  • Eurozone March flash Manufacturing PMI 47.6 (expected 49.5; last 49.3) and Services PMI 52.7, as expected (last 52.8). 
I hear people talk about green shoots in the global economy, but I sure can't see them.  My observations over the years also tells me that ECRI 's long lead indexes will turn up before real green shoots develop in the economy.  Since it does not appear that has happened yet I think we can expect more poor data for the next 3-4 months.


Have a great weekend.

Bob

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