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Technicals Remain Weak

By Matthew Kerkhoff

 

Last week we discussed some of the fundamental factors playing a role in the current market correction and influencing the Fed’s upcoming decision. Today let’s return to the technical side of things and examine what market price action is telling us.

 

Beginning with the S&P 500, after a turbulent end to August, volatility has been easing and the index has developed a small amount of positive momentum. The daily (short-term) MACD experienced a bullish crossover last week and is moving higher from oversold levels.

 

Don’t get too excited however, as longer term momentum remains negative, evidenced by declining 50-day and 200-day moving averages, as well as the recent death cross (50-day MA crossing below the 200-day MA).

 

 

We’ve also got a short-term triangle formation developing, which is viewed by technical analysts as a continuation pattern. In this case, the direction coming into the pattern was down, indicating a higher probability of a break ... Log in or subscribe to continue reading.


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