Data released this morning shows that:
- the price of goods and services (excluding food and energy) has increased
- personal income has declined
- personal spending has increased
as shown on the three graphs below.
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The big news yesterday was the sell-off in gold. GLD dropped from $172 to 168 in less than five minutes.
Yesterday's bearish engulfing candlestick was on SPY daily chart was a refreshing change of pace. SPY gives a much more accurate picture of opening and closing positions than SPX due to data feed issues at Stockcharts and most other places. No idea why that should be but I've corresponded with Stockcharts about it and they tell me there's nothing they can do to correct this.
As we saw with (cough) AAPL the other week, a bearish engulfing candlestick needs to be confirmed with a lower close the next day. The stats for this aren't encouraging from recent history. This is the sixth bearish engulfing candlestick on SPY in the last 18 month, and not one of the last five confirmed with a lower close the next day. Of those five only one (November 2010) was at the start of a significant retracement. These stats are from an excellent chart posted by my friend Cobra at his subscriber site.