If we're to make decisions based on technical studies and not emotions, the SPX today gave us more convincing evidence of further decline. We've been looking at the line drawn at 2830 for support and it was broken yesterday. The index attempted to recover today, but by market close it closed below the support line. This would imply a 35 to 70 point drop from 2830.
Be mindful, too, of the Near-Term Line. Typically, when the bulls reign, this line will fall to 20 give or take and rebound. Today it dropped and closed below 20. This implies short-term bearishness.
Now, what to look for: We will want to see the NT line pop back up right away and move all the way to 80 plus. If so, this could imply a resumption of the bullish market. However, if this line rises but fails to go higher than 80 then this implies short-term weakness. The longer this line stays below 20, the more bearish prices can become.
For this and next week, focus on the Near Term Line.
Here's the chart.
3 comments:
Thanks, Great stuff Craig Keep it coming Please
Love your work
Craig thanks for your tech forecast today. Intermediate & long term are still up what should we key on to change teir direction?
Hi Craig,
Always impressed with your analysis. Keep on coming.
I was shocked to see /ES dropped to 2810 when I woke up this morning. Last night I went to bed it was over 2833... The market is jittering.
Thanks,
Serene
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