Monday, August 24, 2015

Monday Morning Chartology--Incoming

The Morning Call


The Market

            The S&P had an awful week.  It is below its 100 and 200 day moving averages; below the lower boundary of its short term trading range---if it closes below that level today it will re-set to a downtrend.  And as you can see, any rally would have to be massive to regain that level.  It remains in an intermediate and long term uptrends.  Notice the horizontal black lines.  Aside from the lower boundary of its intermediate term uptrend, these represent other possible levels of support.

            At this writing, the S&P futures are down another 70 points.  So it is going to be an ugly opening.  However, if it opens at 1900 (Friday’s close minus 70 points) that would put it close to the lower boundary of its intermediate term uptrend.  Similarly, if the Dow opens at current implied levels, it would be close to the lower boundary of its intermediate term trading range.   Given the already dramatically oversold condition of the Market, this seems like a good point to bounce.  My point being that I wouldn’t panic sell at this level.  If a bounce occurs, then you might want to lighten up.  However, if this move is like the 1987 sell off---meaning the entire bear market will happen today---then wait, and sell when it is clear that there is no bottom, i.e. the 15700/1870 level.

            The long Treasury continues to move higher.  No question, part of this is a function of traders seeking a safe haven trade stemming from the turmoil in the market last week; on the other hand, the no Fed rate hike/global recession scenario may be reflecting the fundamental dynamics driving the Markets down.

            Oil’s chart looks like gold’s did a month ago---down in all timeframes.  The collapse in oil and other commodity prices is among the factors bearing on the pessimism on the global economy and stock markets.

            The VIX smoked everything in sight last Thursday and Friday.  Both the short term trading range and intermediate term downtrend are being challenged.  If those are successful, it will be back in sync with the Averages.


            Markets lose faith in central bankers (medium):


   This Week’s Data

            The July Chicago Fed national activity index was reported at .34 versus expectations of .20; however, the June reading was revised from +0.08 to -0.07.




More on Hillary’s classified email problem (short):

  International War Against Radical Islam

No comments:

Post a Comment