Last Friday’s market fail was technically disappointing as a the week ended lower. The 200-day moving average (currently at 2593) barely held up. In fact, it was breached intraday last week.
The technical set-up is now in messy territory. On a day-over-day basis, it looks like the 200-day moving average is holding up as support. However, on a week-over-week basis, the data is less conclusive.
It appears a significant area of support is setting up at the 2585 level. That was the previous low mark in the current pull-back. It is also barely above the 2582, which is the current tipping point for the Market Macro Indicator.
While the futures markets have been higher over the weekend, the talk about trade wars continues to escalate. It seems unlikely both China and the US would cut their noses off (economically speaking) to spite their face. So this is likely more about rhetoric and negotiation posturing. But it’s certainly got the markets spooked.
More importantly, the futures markets seem to do little to point out the future these days. Other than confirming the immediate trend in the markets — and perhaps providing some insight into the extreme highs and lows in the trading day — there seems to be less correlation between the futures and the market than in prior months. So take the data with a grain of salt.
The 200-day moving average appears to be the place to watch. If that holds, it looks like a trading range between 2600 or so on the downside, and 2700 on the upside until earnings season gets rockin’ in another week or two. If earnings continue to shine, the uptrend can resume (as long as tariff talks moderate). If not… well, let’s not borrow trouble just yet.
For now, the algo database has shaved another point off, dropping to 28% long. The marcro’s are holding steady and remain long. One thing’s for sure, it ain’t boring!
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.