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US Equity Markets Update 8-25-16

Much of the same in the U.S. equity markets: Awaiting a break below the 116.00 level in QQQ along with both the MACD 9-ema & the 13/33ema histogram crossing below their respective zero lines. Negative (bearish) divergences continue to build following the recent double-top high. 100.70 is my minimum downside swing target, about 5% below where QQQ closed yesterday. 60-minute chart:

QQQ 60-minute Aug 24th close

QQQ 60-minute Aug 24th close

Unlike the QQQ, which has yet to trigger and false breakdowns or whipsaw signals on both trend indicators (MACD & 13/33-ema pair), the SPY has triggered a few brief whipsaw signals on the trend indicators & price support but still has powerful negative divergences in place that are very likely to play out for a meaningful correction any day now. First support to watch is 217.07 with a break of 215.30 likely to be the catalyst for a sharp & sustained sell-off. My minimum target for SPY is 210.83.

SPY 60-minute Aug 24th close

SPY 60-minute Aug 24th close

As with all diversified US indices, the negative divergences on IWM (Russell 2000 Small Cap Index ETF) continue to build & only indicate a more powerful correction once they begin to manifest in the form of a trend reversal. My minimum downside target is the 118.60-119ish support zone although the potential for a much deeper correction exists at this time.

IWM 60-min Aug 24th close

IWM 60-min Aug 24th close

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Aug 25, 2016 9:12am|Categories: Equity Market Analysis|Tags: , , , , , |3 Comments

3 Comments

  1. dan123 August 25, 2016 11:40 am at 11:40 am

    Thank you Randy for the market update

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  2. dadtoaaaaaa August 26, 2016 2:31 pm at 2:31 pm

    Randy, Looks like maybe starting to sell off finally, perhaps you can update for Monday

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    • rsotc August 26, 2016 2:43 pm at 2:43 pm

      dadtoaaaaaa, It sure looks that way & I still think it’s coming but then again, it has appeared that the market was on the verge of a correction for a while now so until QQQ 116.00 & SPY 215.30 both give way (or the market can move substantially higher & take out all the divergences), there isn’t much new to report. With that being said, I will be glad to do an update in advance of trading next week with some refined support & resistance levels, price targets, things to watch for etc…

      As you might have noticed, I’ve posted quite a few short trade setups lately. I’m starting to find more & more compelling setups & with the extremely tight trading range, I think there is a good chance that if & when the market finally makes a clear breakdown below the recent range, the potential for a very swift sell-off is quite elevated at this time. By getting those setups out in advance, it gives those that are comfortable with shorting enough advanced notice to review the charts in detail, decide if they like the setup & then set price alerts (or sell-stop orders to automatically trigger a sell-short order if the stop threshold is crossed).

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