In a somewhat surprising turn of events for the day is that the markets have turned down. The 5 day trend is down, but what is bullish, so far, that the SP500 has not closed below the 100 DMA. The DOW on the other hand is fighting to stay above the 200 DMA while the small caps are all over the charts adding to investor confusion.
By noon the major averages were all in the red on sometime moderate volume while the bulls and bears continue to battle it out. Much market weakness is seen and now ‘danger’ replaces the caution flag.
It is still believed the markets will recover and even test the historic highs, but this dip might be a warring of things to come.
The medium term indicators are leaning (barely) towards the hold side at the midday. The all important signs of reversal, up or down, have not been observed so we are mostly, at best, neutral and conservatively holding. The important DMA’s, volume and a host of other studies have not turned and that is not enough for me to start shorting. The SP500 MACD has turned down, but remains below zero at -9.96. I would advise caution in taking any position during this uncertain period although some technical indicators are starting to turn bearish.
Investing.com members’ sentiments are 45 % bearish and when it switches over to bullish, as it did on Tuesday 8-5, watch for the market bottom to fall out some are saying as the markets usually go against ‘Sheeple’ buying high and selling low.
Investors Intelligence sets the breath at 58.5 % bullish with the status at BearConfirmed. (Chart Here )
StockChart.com NYSE Bullish Percent Index ($BPNYA) is at 62.39. (Chart Here) BELOW support.
StockChart.com S&P 500 Bullish Percent Index ($BPSPX) is at 71.00. (Chart Here) BELOW support.
StockChart.com Overbought / Oversold Index ($NYMO) is at -58.32. ($NYMO) (Need to type in $NYMO) Oversold conditions on the NYSE McClellan Oscillator usually bounce back at anything over -50, but this time things may be different – where have I heard this before? Tuesday’s (8-5) numbers are definitely not a good sign, but today they are improving.
