Monthly Archives: May 2016

Rollover

Over the past week, the markets have shown a listlessness that they haven’t exhibited since last December. While its possible we’re looking at exactly the kind of consolidation needed to prepare for another leg towards the all time highs, its equally if not more likely we could be looking at the weakness that often precedes a significant drop, of the type we saw back in August of last year.

Seasonally, we’ve reached the beginning the the weakest six month stretch of the year, with the S&P 500 just off of its post-February highs. While a major drawdown is not necessarily imminent, below is a set of charts that outline the dizzying technical confluence of trend-lines that remain in play as the market pauses.

S&P 500, hourly bars

S&P 500, hourly bars

S&P 500, daily bars

S&P 500, daily bars

SDS, 30 minute bars

SDS, 30 minute bars

Keep your stops tight, and good luck out there!

Staircase

The S&P 500 today rebounded after breaking down below the lower trend channel bound of the recent ascending range its moved in for the past few weeks. What seems to be happening now is the process of re-establishing a new “downshifted” range in which the index can move higher gradually up the staircase towards a top. We are reaching the late stages of the move off of the February lows, and a new basing process will have to take place to set the stage for continued motion towards the all time highs.

This process can take a number of forms, with a sharp selloff or a long period of sideways motion being two possible scenarios. Are the process begins, I’ve assembled a set of charts below to help put the technical picture into perspective as I see it. I’ve also taken the liberty of including the charts of a couple ETFs that track the S&P 500 to add new perspectives on my favorite index. As always, I do not endorse or recommend any of the funds or investments below.

S&P 500, 30 minute bars

S&P 500, 30 minute bars

S&P 500, daily bars

S&P 500, daily bars

SSO, 30 minute bars

SSO, 30 minute bars

SSO, daily bars

SSO, daily bars

SDS, 30 minute bars

SDS, 30 minute bars

SDS, daily bars

SDS, daily bars