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Thursday, June 6, 2019

Daily updatre 6/6

More buying on headlines the tariffs on Mexico might be held off.

Before the headlines hit the breadth was negative and the down volume was well ahead of advancing volume.  At the end of the day the breadth was +55%.  New highs were strong at 194.  New lows were also high at 94 which seems a bit odd.

The futures made it up to the 200 SMA and closed the 5/23 gap down.  There are no more open gaps above.  Sometimes in this position that 200 SMA can be resistance at least for a little bit.

The green count reached overbought levels today. 

The recent decline came mostly on overnight gaps which investors did not seem interested in selling into.  I think that was because there was a lot of hedging on the first leg down when the VIX spiked.  Since we did not have a good panic low I think it is difficult to say if there is leftover selling to be done or not.  Does the hope of a rate cut overrule any worries caused by the blow up of the potential trade deal with China?  I am not a money manager and I have no idea what they are thinking.  The market has worked off its short term oversold condition.  If there is any leftover selling to be done they might come back in the market in the next few days. 

The last leg down was driven by headlines.  This rally has been driven by headlines.  I cannot analyze what the next headline will be.  For the moment the bulls are in control, but we are probably one headline away from bringing on the sellers again.  There is simply no way to predict what is going to happen to this bounce.  I am not going to try.


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