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Tuesday, April 9, 2019

Daily update 4/9

A down day.  How weird is that.

There was talk of possible tariffs on Europe that caused a downside gap this morning.  The dip buyers showed up mid morning and mounted a pretty strong bounce, but the sellers came back and kept the market down.  Breadth was -72%.  New highs dropped way down to 63.  New lows picked up a bit to 13.  SPX held above the Jan. high by a few points.  Will it be able to stay there though?

Today's pullback was contained at the 20 SMA.  The futures are sitting right on that line as I write this.  Will we see a break or bounce?

The green count dropped below 50, but remains above the red line.

The breadth was pretty negative for one day off a new rally high.  Small caps were hit the hardest.  That is interesting since they would be the least affected by tariffs which was supposed to be the excuse for the sell off.  I wonder if the JOLTS report had something to do with that.  That survey showed the biggest drop in job openings in 42 months.  The job market may be starting to weaken.  That would not be a good thing at this point.  R2000 is showing a possible double top at the 200 DMA.  That could be significant.

As tired as the market looked yesterday I suspect the pullback will have further to run.  This is kind of tricky here as further downside could indicate the break out over the Jan. 2018 high has failed.  The financials start reporting on Friday and that could be important for the market.  I do not know if this is just a garden variety pullback or something more problematic at this time.  Earnings will likely decide that and I cannot predict how the market is going to react to what it hears.


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