Market Update: Where's the Love?
Tuning out the noise and tuning into the price action allows us to get a much better read on psychology (price) than trying to directly analyze our own market emotions.
The S&P 500 shows two topping tails followed by downside action that cut through uptrend support, the 50-day moving average, and the 1420 support level. A precursor to this action was the strength in Utilities and general weakness in small cap and beta stocks. (For more information, read Defensives Up, Small Caps Down, and Risk Flatlining.) The next lower support level resides at the 38.2% Fibonacci retracement level (1394). If this level can hold, the index may have a shot at the 1420 level again. A sustained move below 1390 would target the 200-day moving average and 50% Fibonacci support around 1370. I've added a chart of the Bank Index (INDEXDJX:BKX) as well. It's teetering near important support and a lift from the piggies would be constructive for a bounce.
Editor's Note: Andrew Nyquist is an independent investor based in the Minneapolis area. This article originally appeared on his investing and economics site, See It Market.
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