Good morning.
We had a follow through day, that is bullish and that makes me dangerously bullish today. The markets on a mean reversion are overbought but the strength of the move thus far indicates there could be more to come today to the upside. That 1100 SPX is looking awfully attractive.
First we have to get through the Mornings Jobs Numbers.
July and August we started to fall apart as the dismantling of the government’s counting machine (census) took large numbers from the employed column and added them into the un-employed column. August was flat from July. Expectations for today are for the further loss of –118K jobs attributed to the “soft patch” we went through in the months of June – August.
If there is no huge downside here say –200K or less we should be ok to continue our bullish ways. There is now enough economic news telling us we are re-gathering strength, we even got good housing numbers yesterday, so a weak jobless number will be attributed to the historic slow down as the markets begin to look forward.
I did a little back-testing last night which kept me in the bull column. Our up/down volume indicator from Wayne Whaley has moved from below –10% to above 90% in a two day move and Thursday we closed around 83%. Days when the follow through to a +90% day (90% of the volume was up) is greater than 70%, ours was 82.88%, yields a 75% chance of making a higher close the next day.
In all fairness to the bears, the failures have been pretty spectactular and at a minimum tend to retrace at least the previous day’s bar. So dangerously bullish today.
Quote of the day:
In great affairs men show themselves as they wish to be seen; in small things they show themselves as they are. – Nicholas Chamfort
|
Chart |
Score |
Day-1 |
Change |
|
40 DPI |
+6 |
+6 |
0 |
|
52 WNH |
+2 |
+6 |
-4 |
|
10 DHL |
+6 |
+6 |
0 |
|
Total |
+12 |
+18 |
-4 |
Breadth charts shaved a little on the 52 week new highs, but all the other indicators remained in strength mode. The 40 DPI is in bull mode now which for me means “buy the dips”.
$SPX chart:
That chart is hard to buy long. You would at least like to see some pull back to the 1076 area before heading higher. The breadth data is telling us we have one more day left in the move. I would expect that if we do get another day up it will not be a trend up, meaning we will have opportunity to get in long after the open if that is are favored direction
Down day scenario. 1077 / 78 is key support on the down side with 1076 a must hold for the bulls. A break of 1076 could really shake things up and send us down another 10 SPX points very quickly. There are many bears in waiting and wanting to fill that gap back down to 1063.
Upside scenario. If we do show softness and then bounce off of the key areas marked, the bulls need to break back above 1090 and then 1094 and a bullish goal for their next score the dreaded 1100 that sold us off last time down 60 SPX points. A break above 1102.68 will confirm a trend change.
Latest Posts for:
