[Internals, Weekly] Market Direction for Investors
It's so small on this chart, but if you look at the price bar for $VIX, it made an upside reversal bar on the week last week, while the 5-period RSI decisively moved above the 30-line. The price bar for the $SPX made a downside reversal bar on the week.
THIS IS A SELL SIGNAL ON THE WEEKLY CHART. Obviously, we don't know how far down it is going to go, or even if it's going to go, but at this point, prudence overtakes risk-taking behaviour, now that turbulence has hit the capital markets in the wake of the bond crash. In the end, we only have probability, and our duty is to preserve our account first and formost.
What are the downside targets? The 20-week EMA is at SPX 980 and the 200-day MA is at SPX 913. In terms of time, we can just look at the Bollinger Band, and see that the upper band is at 34.19, so the time it takes from where we are now at 22.78 is how long the potential move will be. It can get up there quickly in a few bars, or slowly drift, but given the action we've seen in the bond market, plus the nearly two-month congestion area on the daily chart, I think a fast move is favored.
03.08.04 07:51 #