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Thursday, May 23, 2019

Daily update 5/23

Test of 5/13 low.

SPX came within 4 points of the 5/13 low before bouncing in the last hour.  Breadth was -76% and volume was fairly heavy.  New highs dropped to 77.  New lows spiked up to 176.  That is the most new lows since back in late Dec. 

The futures are back below the 200 SMA.  Will this be a double bottom or are they breaking down?

The red count crossed above the green line and 50.  The bears are attempting to retake control.

SPX closed 17 points off the low.  Right about 3 PM I see TLT (bonds) sold off and SPX rallied significantly.  That suggests there might have been some big portfolio adjustment from bonds to stocks.  That makes some sense as bonds have rallied significantly during this pullback in stocks.  I don't think that is a reliable signal that today's retest of the 5/13 low will be successful.  The bulls will have to show up again tomorrow and keep things going.  I do not know how strong the support is in this 2800-15 area.  Will it be strong enough to try to bounce again?  If SPX continues down through the 5/13 low then this consolidation should be about the mid point of the move.  That suggests a target in the 2750 area which would be below the 200 DMA (2777).


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