What that tells us is that the market is probably not ready to collapse here quite yet. It was a perfect place for it to happen and instead it rallied in the face of awful durable goods numbers.
The Russel 2000 managed to get a close back above the 100dma. Which was an important piece of stopping a landslide from happening here;
The S&P's situation has not really changed from yesterday. We had a false head fake lower below the 100dma on the open, and the rest of the day was green. We closed right in the middle of the 50 and 100dma's;
So the Russel and S&P are over the 100 dma and holding with the daily stochs, RSI and MACD looking oversoldish. We also have a typically seasonly strong period after memorial day for a bit.
Lets get to the bearish items. The sell off at the end of the day felt a little bearish. Up 9 or 10 on the day and closing near HOD and closer to the 50 would have felt a lot more bullish.
The XLF is still ugly, ugly, ugly. It did not really participate today and actually touched the 200dma from underneath and failed and sold back off. The XLF is below all moving averages. Not just the 50 and 100.. it's below the 200 too;
Going back to my short term S&P chart from yesterday. We pretty much followed the possible path to a T. We rallied right up to the 50dma, then hit and sold back off. Now the question is whether we head back down and take out the 100 or head up and take out the 50. That will answer all our questions about what direction the market will be taking in the mid-term over the summer.
One last thing to mention;
Before you get too beared up here, the market traded today very logically. It was slightly oversold, it corrected that oversoldness, then got overbought and corrected that.
The VIX is back below all moving averages.
So while we do have lots of leaders appearing very weak here, like Tech, the Russel, and Retail, this market is trading very logically and with not much fear. This is not an impulsive fear driven market yet.
That could be bearish or bullish depending on how you look at it. You could see it as the market being much too complacent or you could see it as no one is scared and the bull trend is going to resume.
I tend to think it's short term bullish but longer term very bearish. We will see though... just watch those Moving averages.. that's all the matters at the moment. If the S&P closes under the 100.. the market has a problem. If it gets back over the 50 the rally is not done yet.
GL
CJ
3 comments:
CJ,
Nice work, appreciate these daily updates.
last night's tankage in the futures seems like an obvious bear trap, except that it would have only caught a few offsides. That makes me think we have some more business to the downside.
And looking at some tech charts most look toppy except for a few like NFLX and VMW.
Maybe that's how this bull market will end, with NFLX making up 50% of the Nasdaq and nobody left to buy it as the entire market is "all in" LOL.
Zappa,
Just dump your entire retirement account into NetFlix and Linked-In. You'll be a millionaire in 4 or 5 months. I mean what could go wrong? lol
It's hard to tell which way we are going to go here. The VIX is bothering me on a bearish case, the market is not impulsive and there's not much fear at all out there.
Nice work CJ. Another interesting thing today was SPX filled the gap opened on 4/20/2011 from 1312.62 to 1319.12 by hitting 1311.8 earlier this morning. The next major gap I see is from 1273 to 1276 on 3/18/2011.
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