The Dow Jones Industrials briefly traded below its 200-day and managed to bounce into the close. The index is in trouble as it has penetrated the 61.8 retracement level of the April 11 – July 17 move. The last line of support before a likely full blown correction is the 200-day, 25 Dow points below today’s close. Note also, the S&P500 closed below its 100-day moving average for the first since April. Stay tuned....
And from Carl Futia yesterday:
Today I'd like to update my views on the current trend in the US stock market. Above this post you will find daily charts of my favorite three trend indicators. The bottom chart shows the cumulative advance-decline line for New York Stock Exchange issues.
Last week I explained why I thought the market was just beginning a substantial drop. Since then prices have moved generally lower. The Dow (top chart) has actually reached its 200 day moving average. I think the S&P will do the same before this break is complete. This would put the Dow substantially below its 200 day moving average, a potentially long term bearish development.
The top of this market occurred at the extreme outer limits of George Lindsay's long time period from bear market low to bull market top and also at the outer limit of an extended basic advance from the October 4, 2011 low. Moreover there were several small three peaks and a domed house formations which formed their points 23, the top of the domed house, with the Dow's top in mid-July. At the very least this implies that the Dow will drop below its April low and quite possibly below its October 2013 low. Needless to say a drop below the October 2013 low would mean that a bear market is underway....MORE
