This is an abridged version of our Daily Report.
Closing on the lows (WHAT?!)
The S&P 500 fund, SPY, has closed near the day’s intraday low for the past two days, an unusual sight during this strong uptrend that has seen so many intraday dip-buyers. It hasn’t closed on the low on consecutive days in nearly two years. When stocks have been doing well, back-to-back closes near the low have been a good medium-term sign.
Investors seem to be projecting high consumer confidence to mean good sales of discretionary items. The Consumer Discretionary sector had been up 17 of the past 18 days, a streak not seen in 65 years.
Other bouts of persistent buying indicated some short-term exhaustion, but good long-term prospects.
Copper gone to pot
Copper suffered its largest loss in well over a year, but remains above its long-term 200-day average. Of the 13 other times it has suffered such a large relative loss in an uptrend, it went on to a further loss over the next two months 62% of the time.
The S&P 500 has dropped for three sessions yet still remains above its 10-, 20-, 50- and 200-day averages. Prior to 1993, this led to rebounds over the next two weeks only 47% of the time and an average return of -0.2%. Since then, it has rebounded 72% of the time.
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The post titled Closing On Lows, Discretionary Streak was originally published as on SentimenTrader.com on 2017-12-06.
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