This Week’s Price Action
- Immediate term price actoin has deteriorated.
- The move into and below our neutral and bearish levles occured last week suggesting a heavy cash approach for now.
- Bearish patterns in motion across the board, but other the DJIA have not seen follow through.
SPX – Below a H&S top currently holding just above the rising 50DMA. A break below last weeks low would be follow through and the target at 2308.
IWM : Also sitting below a H&S top neckline. Needs to take out the lower trendline and last weeks low to target 128.26
DJIA – Below bearish pattern with follow through.
NASDAQ – Bearish double top in motion
The Bottom Line:
We came into last week watching a potential cup/handle in the S&P. That pattern failed to trigger and instead we saw a lower high and lower low which triggered our first bearish pattern in a while. At this point we are in a protective posture. The reason being is because as we show above, all major indexes are sitting at or below bearish patterns. This is a red flag of caution so until the dust settles and we can be more convinced of a bear trap, we want to step aside. The landscape has become much more uncertain since we acquired that 2365 S&P target a few weeks back. Other than the longer term range breakout which on the big picture suggest an overall bullish posture (meaning at some point we will turn buyer again). Today as we speak, we want to be more risk off and waiting for the opportunity to strike. The next bullish pattern will present itself, but for now we are neutral to short term bearish based on what we see.