Just like last week, the S&P 500 fired a CBL warning and a 50 day moving average warning and then it was cancelled Friday. This is also the 3rd attempt for the S&P 500 to breakout of this churn and move forward. The CBL in red is the same as it was since March 20th. The bottom part of this green wedge is beginning to look like a new short term trend. So much conflicting signals going on here on the daily, that making a decision to be in or out based on this chart is hard. You can see the purple line on the chart, so monthly we are still good there. Last two notes to point out. The blue line at the bottom of the chart is volatility and it appears to falling which normally means prices are heading higher. Bottom right of the chart, you can see the dashed green primary uptrend line peeking back onto the chart. That a very large drop to get a sell signal.
Last week I mentioned there was a lot of damage done to the Small Cap. Well all of that was true but what happened this week? Did it get worse? Follow though? Monday morning it looked like the pain was done and we were heading back uphill. Come Tuesday, it didn’t take long to see we were not done going down. Wednesday we bottomed. Thursday we had an up day. Friday confirmed Thursday and we created a new pivot low. It came just in time to keep the intermediate uptrend intact. Price finished Friday just above the 50 day moving average, so we drop one of the warnings. On the daily chart, things still look a a bit ugly to me, so I will leave the Hold on for the daily. Monthly we are safe. The weekly is starting to look sick because the faster of the two moving averages flattened out and turned lower. No damage, just a warning. So next week, we need to see the Small Cap continue higher and take out the last pivot high. If that happens, we will be at all time highs again. Watching closely here.
Last week I mentioned the International chart was a perfect chart. Well this week it got tested all week and then Friday? Bam! A 2.31% gain in one day to wipe out all of the weeks losses. Even I will be curious what happens here next week. Will we take out the yearly highs again? Go I-fund go!
Monday through Wednesday the selling continues in bonds. I was really starting to look like a disaster. I drew a new red line on the chart to just show me what was the last strongest support point and damn if price stopped going down there and snapped back up. Will it hold? I do not know, but time and price movement will tell us soon. So since last week, bonds fired a sell signal, it is time to transition this chart into a buy chart. So I marked the green CBL level that would fire but 1. Once that falls, then price would have to get back above the 50 day moving average. Weekly, the ma’s are turning down. Bad sign. Monthly, the warning is still on because we are still below the current monthly level.
So last week it was all about the Friday movement. Without that 1 –2% move on the indexes, it would have been ugly. Last year was a positive month as was June, so I’m interested to see how things turn out. Right now, things just seem a bit unsteady. Let’s sit back and watch the show.
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