Based on the last 2 trading sessions, the question we should be asking now is how far down will the markets be going? What does this new week bring? Some weeks it is difficult to technically forecast the market movement and I guess this is one of such week. There are lots of signals we can get into more like a month of bearishness but this does not look like a major reversal upheaval.
The nature of the market is up and down. To help you understand the market and give you confidence that in years to come the stock market will go up and down. Last week saw a size able sell off but it was not unexpected because it happens in the stock market every so often. Up and Down is the nature of the game, it is just like the natural cycle of the seasons, we just need to get ready and ride the season through.
Do not get caught up in the fake news, hyperbole and prevalent news occurrences be confident that up and down is the nature of the market. I am not worried about the future even though you were not set up for market last week such things happen.
We will be taking a balanced look at this market trend. Don’t be worried about the future of stock trade. Just to let you know, I don’t trade the fundamentals or the news, I am a technical trader by looking at the big picture. Since May the market as gone up and at some point we need to come back down.
Since May 2018, the Moving Averages crossed and rallied with a little sell off on the DOW, this continued to move up and down and it happened last week. Interestingly same pattern on the S&P 500 -0.13% and NASDAQ.
DOW JONES (DOW)
On Wednesday night the chart showed a and gravestone occurred and it precedes a selling off (quite a reliable pattern) with such pattern you tighten your stops. We saw the warning and it happened because Thursday market we had a day it gives a 3-day reversal pattern which happened meaning a continuation of the bearing market and may probably lead to the DOW selling off to 26000 points.
On Thursday we sold off to the 10 period moving average and on Friday we had a long lower shadow which means buying pressure. On a 5-minute chart pattern to see the intra-day view, we notice the technical opening showed we traded down and close to the end of the day we traded back up. At the end of the day we had buying pressure despite the market.
What Do We Expect?
The trending behavior setup is either or . Monday 8th October 2018 market is a coin toss because the trading set up is positioned for either a sell off or buy on.
We knew the was coming in because it was all overbought and the splitting. In the event the bearishness continue we need to look for extreme ranges of maybe 25500 but 26000. However, a lot of buying pressure like we saw during the summer hopefully the correction will be done by Wednesday and we will be on the way to our .
Sadly, Oscillator are heading down may enter the oversold region. None of the oscillator is supporting buy. is back to 50% and with a full blow move to oversold we may end up to the 26,000 points index.
The Moving Averages are not compromised, the trend looks strong in the picture. The Ebbs and Flows are natural.
S&P 500 -0.13%
This is pulled back to a good support at 2885 and buying pressure coming in last week. There were lots of selling pressure for 6 days preceding the sell off last week to the 50 period moving average along with a buying pressure end of last week. There is an equilibrium leading to an unconvinced market. What gives me optimistic is we are on a support and if it doesn’t hold then aim for 2800.
Similar assessment on the S&P -0.13% as the DOW. The sell off was fast, scary but not to be too concerned.
Oscillators pulling back and a divergence on and a weak divergence on the MACH-D. with there seems to be a hold point at the 50 mark and may not go below to the oversold range. See the and the horizontal line in the image above.
is in a squeeze. It is not a fully confirmed bear or bull market .
This closed below the 50 period MA and it is alarming because it sold off to 7399. The buying pressure on Friday is a good sign to a if not the NASDAQ could be a complete reversal.
Oscillators are and the squeeze seems to be breaking possibly down to 7250 and a market continues. The squeeze breaks downwards happens with force but reverses also quickly from my experience. is moving up which is sign of a strength and the parabolic is .
The NASDAQ is definitely the outlier.
I believe the big picture trend is still intact there is not enough to change our outlook on the market despite the sell off from the last two trading sessions. The market is 50 percent but we do not need to change our outlook on the market.
This seems to be the overall outlook on the market.