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Coolhand's Market Analysis

Intermediate Turn Lower in Progress? - Posted by Coolhand

Rating: 2 votes, 4.50 average.
Quote Originally Posted by coolhand View Post
It looks like the market has reached one of those intermediate term points where price needs to reverse before pushing price up. Both the S&P and the DWCPF were thrown for losses on the day. That's 2 in a row for the S&P and 3 for the DWCPF

What is really going on in the market-spx-png
What is really going on in the market-dwcpf-png

Support at the 50 dma failed on the DWCPF today. This index, which is not exactly falling apart, has not been able to hit a new all-time high since mid-February. And we now have 2 lower highs. But while resistance above is keeping the index in check, support below has keep it afloat. Really, price has gone nowhere in about 2 months (on average).

Momentum has turned down on both charts. The S&P isn't dealing with resistance like the DWCPF is, but we can see it has marched higher for almost a month with only minor dips along the way, so it shouldn't be a surprise if we get more than token selling after that stretch. Volume is only average.

What is really going on in the market-nyad-png

Breadth is also signaling that a turn lower for a few days may be upon us. It's just barely bullish right now.

It's interesting to me that NAAIM got bullish at a time when the indexes (especially the S&P) were vulnerable to a turn down. I don't want to make much of it because so far this selling in within the norm for the market. I suspect that breadth will turn bearish for a bit before a bottom is in. That's how it's been. The indicators have to get bearish first (typically). We'll see.

I am going neutral on both the S&P and the DWCPF. I suspect more downside is in store, but I can't be sure of it.

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Comments

  1. joblin20's Avatar
    Awesome commentary! Very helpful.

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