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Friday, August 23, 2019

Daily update 8/23 Bear dead ahead?

This is the third day this month with 90% of the volume in down stocks.  That is not a bull market phenomenon.  I have been talking about the market possibly making a major top since last summer.  There has been lots of ups and downs, but the market is still lower than it was in Jan. 2018.  I think these down days happened because investors have finally figured out that there will be no trade deal.  There will be a nasty trade war instead .  I have been saying all along China does not want to make a deal.  They just want Trump to go away.  That is not happening so expect things to get ugly and I don't think the market will like it.  I know, I know, everybody thinks Trump cares what the stock market does.  I don't think that is true.  Sure, he brags about it when it goes up, but that is just because he has a huge ego and brags about everything.  He also knows the market went up over 40% after he got elected so he thinks he is playing with house money so to speak.  Things will have to get pretty bad before he will worry about the stock market.

The market is still in a trading range, but the down moves have been much stronger internally than the up moves.  Breadth was -83%.  New highs were 139.  New lows spiked up to 185.

I had a fresh tick sell signal today.  That probably indicates the half baked rally we have been having the last few weeks has ended.  The objective of working off the deep oversold condition we had at the 8/5 low has been fulfilled.  We might bounce early next week, but unless I get a tick buy signal I expect lower prices ahead.  I think SPX will break the lows from earlier this month and continue down to the 200 DMA at least. 

The weak sister indexes never pulled themselves together to make a run at new highs.  Now we have some serious selling going on.  It looks likely the top that has been forming since Jan. 2018 is complete.  I would expect major turbulence ahead. 

Have a great weekend.  Peace.


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