I have been cautious on the outlook for the stock market since the roll up stage of QE 3 last
autumn and have argued this year that the bull market was on tenuous grounds from both
fundamental and technical perspectives. The key directional fundamentals in toto remain
positive but have been deteriorating up until recently when there has been slight improvement.
But, I cannot take any credit for the sudden, sharp selloff so far this week. Even though the SPX
is pricy and many solid observers are looking for a sharp price correction, the basic fundamental
framework for stocks has yet to turn negative. So, a tip of the hat to the other guys. SPX Daily
The SPX has entered a short term downtrend. 2015 price support has been has been taken out,
the 25 day m/a is rolling over and RSI and MACD, which have both been trending down, are
weak. The SPX is moderately oversold at a 2.8% discount to the 25 day m/a with RSI also
approaching an oversold position. So, it will prove instructive presently to see how much fire
power the bears are carrying since there is a moderate short term oversold condition in place.
No comments:
Post a Comment