Intra-day breadth continues to be a problem, but it’s not a perfect world and there are always problems. If the current situation does not morph soon, then the Summation Index/$NYSI will start giving negative readings. Since peaking with a reading of +57 on Thursday, November 29th, the daily readings of $NYSI have dropped steadily with this past Friday’s reading coming in at +22. The Summation Index is always early in warning of underlying weakness and often times the weakness turns to strength without the markets or anyone else being the wiser. There is no ‘sell’ signal on the $NYSI chart that I use and though I’m watching this closely I see no reason for anything other than concern for now. I have been and remain long UPRO & TNA and I’m not about to bail on these here, subject to change at any time without notice.
Well, AAPL continues to put Big Tech under pressure, and I don’t think we’re anywhere near the end of AAPL’s decline. For all I know, AAPL could drop another $200 to $300 dollars from current levels before it finds equilibrium. If not for the $SOX index being up 1.37% on the week, the Q’s and $COMPQ would have been down a lot more than they were and so as long as the $SOX keeps rallying then the decline in the Q’s and $COMPQ is just going to grind lower giving little comfort to shorts, IMHO, of course.
60Min chart of the Q’s showing them moving below the 13/34 EMA’s. Also note that 200EMA has flattened out and if the Q’s don’t rally early next week then the 200EMA will roll over. I’m going to keep the upper falling trend line in place unless the Q’s take out 64.53, the low swing point from last week. If the Q’s fall below 64.53, then it will show that it can and probably will go lower so then I’ll move the upper trend line to show a much larger falling price channel. You could argue that the Q’s have broken out of the Bull Flag pattern but it’s a pretty weak argument.
Click on the charts to open them in a new window.
Daily chart of $SPX showing it moving up, though without much conviction. Proof that $SPX wants to and can go higher will come with a close above 1423 and then 1434. On the other hand, should $SPX break below the trend line and then close below 1409.28 then that would be a sign that $SPX can go lower and may want to go even lower.
Even though I’m concerned about intra-day breadth, I expect we’ll see new highs before we see new lows next week, or famous last words. And if there is any kind of positive news out of Washington over the weekend, then obviously we’ll rocket higher for at least one day. After that, who knows?
GL in the week ahead.