Midweek Update

I will keep this brief, as I’m super busy and pressed for time. The US stock market is looking pretty ugly. This isn’t news to anyone who follows the market on a consistent basis, but I will give you my read.

In the very short term, we are oversold; we can expect a bounce to the 1300-1320 area on the SPX. At that point we need to watch how the market reacts. The internals are quite weak. A failed rally attempt in that range would likely bring us back to re-test 1250 in short order. I am really looking for support to firm up in the 1220s.

That is not a disaster scenario by any means (unless you are heavily levered long), but does represent a significant correction. My expectation at this point is to sell the bounce unless we move back up with good volume. A break above 1350 would negate that outlook.

Next support levels are round numbers where the index broke through previous resistance: 1200 from November and 1100 from last July-September

(click on chart to enlarge)

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One thought on “Midweek Update

  1. Thanks, Harry, this is a great summary of the current market condition. You said it all, leaving me nothing to add.

    Aloha,
    Shirley

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