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Monday, April 8, 2019

Daily update 4/8

It was a bit of a mixed day.

After a down opening there was a late day push to a slight new rally high close.  Breadth was slightly positive.  New highs dropped down to 97.  New lows remained low at 6.  There was some volume on the late day rally.  I don't know if there was some kind of news involved or not.

The futures continue their slow push higher.  Volatility overnight has been very low lately.

The green count is slipping lower the last several days.  The rally must be thinning out a bit.

Breadth is weakening and volatility is contracting like the market is getting a little tired.  Sometimes that leads to a little pullback.  So far there has been little interest in selling the rally though.  I don't know if earnings season will change that or not.

Investors have been bidding up stocks since the Dec. low on the theory that everything will be fine and that the trough in the global economy is at hand.  I believe the rally has convinced many people the global economy is stabilizing.  The economic data is not showing that yet though.  Is the market right or is this one of those times it has gotten things wrong?  The trough in the market is usually about 3-4 months ahead of the economy.  By that count the global economy should be ready to turn up very soon.  ECRI has not said their long lead indexes have turned up yet.  Rather their latest reports seem to indicate they expect continued weakness.  The U.S. leading indicator has been sideways since Oct.  There is no clear sign whether the U.S. economy will weaken or strengthen from here.  I suspect people might hesitate to keep pushing prices much higher until they can "see" they are correct.   Earnings season may shed some light one way or the other.


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