market is still not out of woods

last week, the day after Christmas we have had the best one day show in about 10 years in the market. But it was not convincing, why? because there was so small rise in the number os stocks going above the 50 days SMA in S&P 500. On the big day it went up by 3.39 which is insignificant compared to the drops (look at the big red candle o Dec 4th – one day drop of 23%!!)

Screen Shot 2018-12-29 at 12.49.46 PMScreen Shot 2018-12-29 at 12.53.15 PM

also checking QLD – we see that on the same close at 12/20 the OBV was 56 million and on 12/26 the OBV was 53 million. this is divergence and hence the market is going to go down further.

on the COMP 6630 is the next resistance (weekly low on the week of Feb 5th 2018)

One positive thing is the DMSI – quoting them “The Delta Market Sentiment Indicator (MSI) declined to 7.5% this week.  The range on the Delta MSI is from 0% to 100%.  A 7.5% reading is very low and a sub-10% reading has only occurred during four periods (including this week) in the past 15 years (a longer history is shown this week instead of the usual 12 month review).  Historically, the stock market has shown strong performance over the next twelve months post a sub-10% reading.”

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