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Tuesday, March 26, 2019

Daily update 3/26

Bulls strike back.

The market gapped higher and ran up a bit more.  However, there was selling into the strength that eventually caused the market to pullback well off the high.  SPX rallied 9 points in the last 15 minutes to make the day look stronger than it really was.  Even with that rally SPX was still 11 points off the intraday high.  Breadth was +71%.  New highs popped up to 137.  New lows dipped to 21.  Volume was light again and slightly less than yesterday. 

The futures rallied above the 20 SMA early in the day, but closed back below it.  We got the bounce off the 100 SMA, but it is inconclusive that the pullback is over.

The green count crossed back above the red line, but barely.  Sometimes when the market consolidates these lines will form a braided pattern.  It is a bit early to say that is what is happening here, but that is one possibility.

The bulls came out to support the 2800 level.  However, they did not have enough vigor to say they have won the battle yet.  Near as I could tell the market gapped up on a report from Goldman that we should not fear the yield curve inversion.  I don't think that in itself will be enough to send the market breaking out again on the upside.  It is in a precarious position here.  Another close below 2800 might bring out more profit taking since we would then have a lower high.  The bulls could use another upside thrust bar to wipe out the big down day from Friday. 


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