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Market Recap for Tuesday 9-13-16

The bulls failed to hold the Q's above the key 116 level which was very briefly regained yesterday before the close. Today's price action was solidly bearish throughout the day & helps to strengthen the near-term bearish case with a continued move down to the 110.75 area. Only a 60-minute close back above the top of Friday's gap will inflict serious damage to the near-term bearish case at this point.

QQQ 60-minute Sept 13th

QQQ 60-minute Sept 13th

Likewise, the bulls also failed to hold the key 215.30 level that I've been harping on as an important support level to watch for nearly two months now, a level that was impulsively taken out on Friday along with the key 116 level on QQQ. SPY continued to find support on my 212.68 initial support level since Friday. Therefore, the next solid break below that level will likely bring SPY down towards at least the 210.83 area & quite likely the 208.64-207.12 support zone.

SPY 60-minute Sept 13th

SPY 60-minute Sept 13th

Both the small caps (IWM) along with the mid-caps (MDY) clearly took out Friday's lows today & I don't see any decent evidence in the charts that the selling is even close to over. With the small & mid-caps leading the way down, it is safe to say that the markets have recently flipped from the post-Brexit "Risk-on" trade to a "Risk-off" trade as of recently.

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Sep 13, 2016 8:25pm|Categories: Equity Market Analysis|Tags: , , , , , , , |2 Comments

2 Comments

  1. alshaw September 13, 2016 9:35 pm at 9:35 pm

    ok if you go to spy 210 209 208 207 206 205 204 ok then what back to 2200

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    • rsotc September 14, 2016 9:38 am at 9:38 am

      alshaw- That’s certainly possible another 5% or so downside in the SPX before a reversal & move up to 2200+). However, the longer-term charts are pointing to a lot more downside than just another 5% drop. While all the current & recent bearish techincals & fundamentals can be unwound or burned through (daily & weekly divergences, record low short interest in many leading stocks, recent record highs in margin debt, record high valuations on many key stocks, etc…), the more the market falls from here, the more the intermediate & longer-term bearish case firms up as key support levels are taken out, intermediate-trend indicators starts flipping from bullish to bearish, etc… It just too early right now to say if this will just be a mild correction or much more but we could know very soon. Just focusing primarily on the intraday charts right now but certainly keeping an eye on the important support levels & other developments on the daily chart as well.

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