Let’s jump right into it…
I haven’t looked at this chart for about a week and I’m not a fan of what I’m seeing… of course, the market news can move a market anywhere and the chart may not predict the future. However, using technical analysis is a great tool for locating good entry and exit points. It’s important to understand when the market is pivoting or rolling over. We’re not there yet, there the chart below shows a few things you might want to watch for…
- SMA20 – Keep an eye on this level. A fall below could open up the doors and invite in a lot of shorts. We’ll worry about support below SMA20 later.. For now, we’re still in an uptrend as long as the SMAs continue to drift up and the SPX stays above SMA20.
- MACD just went negative. This is a negative divergence from price, but not too significant at this point. In other words, price could still win and recover MACD back above zero. However, it’s a reason to pause and think about your cash position.
- ADX Over the last few years, I’ve found it more and more useful to look at ADX as a general indicator of what side of the trade most people are in. If no notice, the difference between the red line/green line closed substantially today. If they cross, that’s a big red flag to watch for a market reversal. Also, keep an eye at the ’20′ level. Trends tend to continue when this level is broken by +DI or -DI. In this example. -DI just crossed north of 20 (20.56). That tends to give the strength to the bears and should be taking as a slight warning.. it’s not as important as the cross, but still showing bearish strength coming in here.
INITIAL JOBLESS CLAIMS
Initial Jobless Claims will be the focus tomorrow morning. We’ll see how that shapes the day along with POMO action and any comments that might trickle out of the FED. My gut is that we’ll have a down end-of-week, but we’ll see how it goes. With elections, earnings, FED, and jobless claims, anything can happen..