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Friday, August 30, 2019

Update 8/30

SPX still under the 50 DMA.

Here we are back at the top of the Aug. trading range again.  The sellers started right from the open after a sizable gap up on no news.  The buyers stepped in after a sizable sell off in the morning.  However, the rebound never made it back to the morning highs.  Breadth was +52%.

The futures are struggling with the 200 DMA.  They closed back below that MA to end the week.  The resistance that has been in this area all month appeared to still be there today.

The green count is above the red line, but is still below 50.  It is also well below the green count from the last time we were in this area.  The intermediate indicator remains below 50 so there is still downside risk here.

I have not seen a tick buy signal yet.  The internals are not clearly building up steam for an upside break out either.  I have not heard any word about cancelling the next round of tariffs scheduled to go in effect Sunday night.  I think it will probably take a positive news event to break out on the upside next week.  I don't know what that might be, but a tweet could always change things.  If the market turns back down the odds of breaking the Aug. lows are pretty high.  It is rare to spend this much time below the 50 DMA and not hit the 200 DMA.  I would not blame money managers for not wanting to pile in with all that is going on.  The July monthly price bar was a doji and this month closed below the July low with an increase in volume.  That has negative connotations.

Maybe this cartoon explains why the 50th reunion of Woodstock was cancelled.

Have a great weekend.  Peace.


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