Daily charts for S&P
Daily charts for NASDAQ
We’ve got the failure of the 50 day moving average and the break of the lower MOBO bands over the past week. This is the classic case of the start of the downtrend. In addition, we have also failed the break above the 200 day moving average. Should we fail to break above soon, we might be experiencing a double dip recession in 6-10 months time.
Historically, we should be seeing a little bounce in the market especially after the indexes had broken all supports within such a short period of time. I’m inclined to believe that the doji on Friday was the bounce and that we will be on our way down again on Monday. Otherwise we might have a bullish Monday or Tuesday (which will be the 2nd wave) followed by the 3rd down wave that should bring us down to the lows of the year.
Daily chart for VIX
It is interesting to see VIX moving with the moving averages. The VIX made a low on the 21st of June at its 200 day moving average support and broke the 50 day moving average. Now it is resting on the 50 day moving average. This VIX price movement up to 30 is reflected in the 4 down days last week. It looks like VIX is poised to rally and this could mean a bigger drop in the indexes over the next few weeks.
Daily chart for Gold
Gold had been extremely resilient and had bounced off one support after another. I will be looking at entering gold at the next price dip. (if it ever dips…) Profit target at 1,425.
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