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Wednesday, March 24, 2021

The market is looking heavy 3/24

In the last blog post I noted the market was acting poorly, but it could bounce.  It did and SPX made a new high, but internally the market appears to be getting weaker.

SPX closed below its 20 SMA today.  It only made a marginal new high on the last bounce.  It looks to me like it might want to test that last swing low which would take it down to the 100 EMA (white line).  The QQQ chart looks much weaker.

Usually QQQ tops after SPX, but as you can see it got nowhere near the high on the latest bounce.  This would seem to be a significant warning sign.  Check out IWM.

IWM also made a slight new high, but it is already below its 50 SMA.  

I noted a few times late last year there was very little selling pressure.  I figured people did not see an urgent need to take money off the table so they wanted to wait until this year.  When the new year came there still was very little selling pressure.  I did not mention this before, but that got me to wondering if they wanted to wait until after a year to get the lower capital gains tax rates.  That very could be and we just turned the corner on one year since the crash low.  There might be a little more selling pressure over the next few weeks.

May God bless you all with peace, good health, and happiness.

Bob



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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.