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Thursday, April 25, 2019

Daily update 4/25

A little selling and a little buying.

SPX tested below yesterday's low, but the dip buyers rushed in.  However, small caps were hit pretty hard as IWM was down .8%.  Breadth was -61%.  New highs dropped way down to 68.  The more interesting number was new lows popping up to 42.  That is unusual at the highs like this. 

The futures tested the 20 SMA, but held for now. 

The red crossed slightly above the green line.  Is this going to be another bounce cross as buyers pile in again?  That is kind of hard to say with SPX right at the old highs.  It could be a sign the market is tired and in need of a pullback.  We will have to wait and see which it is.

South Korea announced their Q1 GDP came in at -.3% (expectations were for +.3%).  That was the first negative print since Q4 2008.  Weakness in exports especially semiconductors was responsible.  That is rather interesting since the SOX was bid up sharply to a new high over the last few weeks.  The SOX ended up -1.6%.  Was this a one day wonder for the SOX?  Will people that have been relentlessly buying the semi stocks on 5G hype question those purchases? 

The market internals continue to weaken a little bit.  It would make sense to have a pullback here because of the steepness of the rally.  However, we know the market rarely does the sensible thing.  I would be remiss if I did not mention the possibility of a very big triple top going on here.  SPX is not very far above the Jan. 2018 high.  It is important for both the industrials and transports to make new highs.  Until then there is considerable risk the global economic data continues to disappoint and eventually breaks the rally.


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