Ouch. After prices breaks above last week’s high, it opened the door for the bears instead of making head way for the bulls. We now know the importance of a stop loss, or staying hedged to protect your capital, because the market is always RIGHT. This week, what will the market do again, let’s take a look at what the charts have to say.
Monthly chart shows Aug ended in red. Trend is still intact, but if bears continue their ways in Sept, that would change the monthly trend direction, which can last for 1 – 3 months I it is just a dip in an uptrend. So, will it happen? Let’s take a look at the weekly chart for more clues.
The intermediate term is still in its mid-term down trend. S&P is still slightly more resilient than the Dow. They are near the bottom of their price envelop, but if they wish to continue its way south, there’s still room to go.
Short term trend is flirting with support.
VIX(Fear index) weekly, still have some room to move up, in line with weekly Dow and S&P analysis. VIX daily touched the red zone and a shoot star candle stick pattern was formed last Friday.
Summary:
Monthly trend is UP but paused in Aug.
Weekly trend is DOWN (with some room to go lower)
VIX weekly is UP (with some room to go higher)
Daily trend is FLAT to the down side (flirting with support).
VIX daily is UP (but shooting star formed when touched resistance zone)
Weekly trend will take leadership role. However, a trend does not go in a straight line be it up or down. Since daily is on support, and VIX daily is on resistance, a rally on the Dow and S&P is possible this trading week. But any rally can only be considered a bounce in a down trend, unless rally breaks and stays above 1670.
Cheers
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NOTE: All information provided “as is” for informational purposes only, not intended for trading purposes or advice.
