Signs of Weakness

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Yesterday was the 24th consecutive close above the 5 day MA. This has only been exceeded by runs of 25 days in 1991 and 1987, though in 1987 one close on the MA might have been a whisker below. If we were to see another daily close above the 5 DMA then that would match the record back to 1980, and possibly for the SPX lifetime, as I’ve only looked back as far as 1980. This has been an amazing run. One thing I would note from the four longest runs since 1980 is that they all failed into modest bull flag retracements before continuing upwards. We may see this break down below the 5 DMA today and if we do, that’s worth bearing in mind. SPX daily 5 DMA chart:

141120 SPX Daily 2014 Closes over 5 DMA (more…)


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Last night, I was intrigued to see that, in spite of the USD/JPY powering to lifetime highs again, the ES had simply stopped caring. For the longest time, as long as the Japanese Yen kept heading toward toilet paper status, U.S. equities kept surging, thanks to the flood of carry trade money. and yet as USD/JPY roared toward 119, the ES rolled its eyes and remained in the red.

I was pleased this morning to look at the USD/JPY (even before I bothered with the ES) and saw it virtually unchanged. I swiftly changed charts to the ES, and sure enough, it was down 8. Huzzah! So with ES, NQ, and YM all solidly in the red right now, we’ve got a good, solid chance of not having every single index known to man close at a lifetime high again today.