All of the 5-minute charts are the same. The markets sold-off, rallied and then sold-off at the end of trading on very heavy volume. The end-of-day selling indicates traders are still very nervous about the markets are aren't willing to hold anything overnight. Considering we are in the middle of earnings season and we have seen some serious writedowns this week alone, I can't say I blame them.
On the daily chart of the SPYs, notice
-- Prices are below the moving averages,
-- the Shorter SMAs are below the longer SMAs
-- Prices are below the 200 day SMA
-- Today we had extremely heavy volume and the formation of a spinning top, indicating the market is undecided where it wants to go next.
This chart should cause some concern. Notice this index was the last to fall below the 200 day SMA. In addition, the 20 day SMA has moved below the 200 day SMA, and the 20 day SMA will probably do so within the next week or so. In addition, the 10, 20 and 50 day SMAs are all moving lower right now.
Notice the following:
-- Prices are below the moving averages,
-- the Shorter SMAs are below the longer SMAs
-- Prices are below the 200 day SMA
-- Prices are more than 10% below the 200 day SMA.
2 comments:
I think that the DIA, VTI (Wilshire 5000 tracker) and QQQQ all show that they're sitting on a very strong support line. Each clearly shows a head-and-shoulders pattern. I don't know if the next move will be a bounce or penetration, but eventually (not to long from now), it sure looks like the market is set for a sharp drop of 15% or more.
Best,
Terry Steichen
PS: I find your captcha's finally displaying well - great.
MY MISTAKE - YOUR SYSTEM WON'T TAKE MY INPUT. SORRY. YOU NEED TO FIX YOUR CAPTCHAS BEFORE I CAN CONTRIBUTE.
Well, it took me three captcha cycles but the above message actually got through.
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