Do you want to feel depressed? If not, do not look at these charts and read the data below because it is ugly.
Well it doesn’t get more clear than this that selling is in charge of the current markets. If you believe the professinal investors, this is the time to start your buying. When things are the worst, you should be throwing money at the marktets.
Looking at the S&P Daily chart you can see every support level and sell level has been broken. We broke through the positive very short uptrend in higher pivot lows at point 1. We broke below the negative lower channel at point 2. Then we finally broke below the very long term uptrend at point 3. Do you have any idea how far back the uptrend line goes? Let me show you.
The current long term uptrend dates back to 10/2011. It has been tested twice starting back in August 2015, but it held. Now it has finally broken and looking at the overall picture it isn’t hard to see that we have hit an overhead wall and are unable to break through it. The high of $2134 seems to be a ceiling that price just cannot seem to break. Those lower pivot lows that were set back in 2015 must hold. Those levels are $1867 – $1871. If price fails to hold there we could free fall into the $1730 levels looking for support. The last monthly signal was a buy December 31st, but we are so far below it at this point, I have to put a hold on that signal.
Small Cap also broke is long term support and looks like more of the same is ahead. On the weekly, you can also see that this long term support that also dates back to 10/2011. Click here to see a long term weekly chart.
The International just keeps sinking lower. We are now at the bottom of the lower channel.
Bonds are the only inde we have showing life at the moment. Price closed above the green buy CBL level and then Friday, bounced above the 50 day moving average. This is a very early buy signal and one that might be worth taking. We are also at the bottom of the support channel and that channel is squeezing together for a breakout moment. I would feel a lot better if price closed above the monthly level and above the red downtrend line. So Monday, if we are above the 50 day moving average price of $108.49, you could take that as the best early signal you can get. I will not be making this move yet and will stand by for higher prices and more signals from the stockmarket.
Conclusion: Last week was a pretty ugly week that was mainly driven by the Chinese markets. Will we continue to slide here? It is possible if the above mentioned support levels do not hold from 2015 August lows. I feel that at least a bounce is due, but I have nothing to base it on other than gut. I do know that nothing in the US economy has changed and we ship very little to China, so not sure it will have a long term affect on us.
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