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Yesterday we looked at the Dow Jones Industrials and today we are highlighting the cash S&P 500. The reasons are obvious. The stock market has sold off considerably from its high and this usually draws a great deal of interest and concern from most all investors as well as those who don’t even invest. In the grander scheme of things there may be consequences felt by everyone when there are significant moves made in the stock market.
The chart above illustrates that the major uptrend line connecting the March and July lows had already been broken some time ago. We showed previously that this had just occurred in the Dow Jones. The S&P 500 has now also closed beneath its 50 day moving average, another barometer to gauge the market.
We have displayed a set of Fibonacci retracement levels which show that the price has reached a .500 mark at approximately 109030 with the .618 at approximately107600. This particular retracement level lined up with what looks to us to be a minor line of support. This may provide a price from where at least a “dead cat” bounce will take place. And possibly it will turn out to be more. But our stronger feeling is that momentum has turned to the downside and that this set of Fibonacci retracements will eventually all be exceeded and we will find lower levels to pursue. We will do our best to be timely in providing where these are.
Our Trade Focus has seen the first of suggested short entry approaches initiated with more to come if the downward move continues. Let us know if you are interested.
Good trading to all!!
Jeff
CB&S
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