Mid-Day Update – 7/12/2021

Another bullish market breakout to add to our collection. So we are status quo for now, but still wondering how the small megaphone pattern will resolve on the daily S&P 500 chart. Will it lead to another break? Or will it be a consolidation to go higher still? Be mindful of the magnets above at 4404 and 4500. 

Internals are mixed, as we broke out of the 30-min clearing range and then doubled it, a widespread occurrence. But with internals mixed to weak, I am not sure there will be much more index upside today.

Meanwhile, our XLF entry was well placed on Friday, as the XLF is the top-performing of all 11 S&P 500 sectors today. XLK (tech) is weaker, in fact barely positive, indicating at least some of the anticipated rotation discussed in this morning’s writings.

Our next discussion will be today’s epilogue after the close. Remember that I will be out Wednesday, Thursday, and Friday traveling back to the States, so there will be no outlooks on those days. If anything of significance occurs, I will send off a quick note from my phone. Continue to use a close for two hourly bars below the daily 5-EMA on the XLF for a stop. The XLF has managed to get through the 21-day line today, leaving only the 50-day line to conquer into clear sailing. The daily 5-EMA sits at 36.63 at this writing.

A.F. Thornton