Some Tech thoughts on greater world markets. Below is a chart of the US Sp500 as an indicative example.
Some things to notice
RSI in oversold territory already at 37.72. Last time we had a correction in Feb we were well overbought 85-90. So Bears may have a tougher time driving it down from here
The 10d EMA has been struggling to rise above and stay above the 30d EMA this is concerning indicates bull are tepid - short term weakness. The 10d EMA has now crossed below 30d EMA. This together with the fact that there was a gap down decent % move and we closed near lows would indicate more immediate short term weakness.
The MACD is indicating further weakness in the immediate future with the cross over to the down side
We are very close to the 150d SMA this is a prelim alarm bell ... A cross and sustained presence below the 200d SMA will indicate the end of a bull market according to many market macro pundits.
We had have had one bullish higher low (early March) since the low in Feb but the higher high off the back of this low did not penetrate as high as perhaps it should to maintain the uptrend channel. I would have liked to see it get up towards the 2850-2900 region. Was this the signal to watch for?? Todays close is also below the close of the 1st higher low in early march as mentioned above, this is bearish IMHO
Volume has not been heavy yet indicating tentative selling so far ... If we can get through the next week on similar lowish volume we may see off a sharper drop.
Question is if we are to proceed lower then how much support exists in the 2500-2700 region ?
Other charts I have looked at include the DJIA, RUT2000, Tran and they all show similar signs. Generally the other world indicies trail the US but Asian index charts (SSEC - China, Hang seng, Nikk) look more weakish than the europeans. I also looked at the US Vix. The Vix's avgs increasing suggest a period of increasing volatility (weakness) is still ahead of us in the immediate next few trading days at least.
So my opinion is we are at a stop sign, at a cross roads if you like, trying to decide which way to turn. Its almost like we have weakish market just waiting for decent catalyst/event to conclusively set the direction for us. It could go either way in the next week or two. I concur with Diver Dan's opinion here this is not solely about tariff trade wars... but more to do with the increasing dysfunction in the Trump administration I suspect. Will the tariff's be the straw to break the camels back? I don't know. Seems every other day some pivotal person in the Trump team falls off the perch. This will cause creeping and increasing uncertainty and markets do not like uncertainty... uncertainty is usually a sell.
So big night tonight in the US I think, odds are for a further decline tonight I will be looking to the combination of direction, % move and volume as a measure of commitment to the selling (assuming a red close) if less than last night then maybe a storm in a teacup if sharp decline % wise and increased volume then not so good ... I hope not but hope is not a good trading strategy.
All is IMHO DYOR
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