S & P 500 Support holds, but a third test is likely to be a different story

The indexes collected another losing week with a low volume, oversold bounce into a three-day weekend. The S&P 500 and Nasdaq have been down for three consecutive weeks, while the Dow Jones Industrial Average has a five-week tapestry.

The action this week was choppy and inconsistent, with a sharp selloff on Thursday the most notable action. The movement is mainly due to various headlines dealing with the trade war between the United States and China, but there are several concerns that bubble about a brake economy.

The biggest positive this week was that S & P 500 did not break during last week's low around 2800. It is the most important technical level, and if tested for a third time, the chance of it falling will increase. Meanwhile, there is a trading area that reaches just under 2900.

While the bear has failed so far in breaking the support, the bulls have been as deficient in generating upward momentum. There is very little leadership and some very weak sectors such as banks, retail and oil.

The Taurus remain hopeful that something positive will evolve on trade and catch the bears, but there are few signs that progress will be made soon.

When we consider negative seasonality along with financial concerns, the bears have a good argument, but they have consistently not been able to catch up and do real technical damage.

The indices are in a weak position, and Individual stock picking is very poor, but support so far, and there is always the potential for a new surprise to spike the market.

I still have very high cash and will keep me patient until conditions improve.

Have a great Memorial Day vacation. I'll see you on Tuesday.

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