First, my per-market note today:
By closing, SPX has given up most of its initial push-up and is only up 8 points! A big disappointment for those FOMOs who are chasing the market due to the "positive" jobs report. To me, this is a clear sign that the market has been exhausted by its recent aggressive rebound and may likely be ready to start its next leg down, probably as soon as next week.
While no one knows how much down the market will go in the weeks ahead, purely from the technical perspective, it seems to me that SPX can easily go down towards 4200 for the next downturn. As shown below, SPX is clearly showing a Head & Shoulders pattern, a quite bearish setup. It the pattern indeed plays out as it should, a 200-300 points decline is in the card, which actually nicely fits its next major support around 4200. Of course, TA is never a precise science but rather an art. So the exact size of decline is unknown for anyone. Nevertheless it dose suggest a sizable decline is quite possible in the seasonally bearish month of September.
Be cautious!
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