By Investor’s Yak
When the market sets up for failure during a late summer slowdown, it could be a hint to stay away.
See the charts for yourself.
Here are the three things you need to know:
1. Major Market Indices are setting up troublesome looking patterns:
- DJIA is priced below its 50 and 200 day moving average (DMA), with the 50 crossing below the 200 (a big Danger sign).
- IWM (Small Cap) is also priced below its 50 and 200 DMA.
- S&P500 is below the 50 DMA and resting on the 200 DMA.
- NASDAQ is below the 50 DMA and at price support. It is the strongest of the indices.
2. Action Zones for above Major Markets
- Daily charts show a near term setup for a bounce to higher prices.
- Week charts indicate a longer term push in the negative price direction.
3. Other Sectors
- Healthcare and Pharmaceuticals appear to be topping out and the Biotechnologies have already busted below the 50 DMA.
- Financials, while in a trading range, the weekly Action Zones show the possibility of topping.
- Homebuilders are in a trading range
- Utilities may bounce but will most likely find resistance at the 200 DMA.
- Almost every other Sector is showing signs of trouble (Semiconductors, Technology, Materials, Retail, and Transportation).
- Energy and Metals (gold, silver, platinum, etc.) have been beaten down for months.
Event calendar affecting markets this month
20 August – Greece ECB bond payment due
28-31 August – Window Dressing
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