The Almighty 200-day Moving Average (200MA) has been a faithful secondary trend reversal indicator for ages.
Below are the link to the basic technical analysis setup for six major indices that I track daily.
DJIA, DJTA, SP500, NASDAQ, Russell2000, Value Line
I am not going to explain why these indices are being used, because that is not the point of this blog.
What I want to point out is that all indices are in the process of major technical breakdown, as they are all below the almighty 200MA, except Trans. By first glance, it looks as if we are at the same negative momentum as the previous low set in May. But if you look closer, the differences between now and May low are (1) DJIA moved below 200MA with increasing volume, (2) SP500 is now below the 200MA line for the first time, (3) NASDAQ is so far below the 200MA that it needs a miracle to bring it above it, (4) the small cap Russell is now convincingly below 200MA, and (5) Value Line is now below the 200MA line for the first time. In short, we have 2 first times, and 2 lower than May low.
Since the trend ebbs and flows in cycles, we might be near a short-term low. But considered the extreme weakness in all most all indices, the coming upturn may be on a short leash and quickly out of breath.
While I see high probability next week will end on slightly positive note, the current setup is very bearish for intermediate term.
posted by jason @ 9:47 PM
0 Comments:
Post a Comment
<< Home