Sunday, January 5, 2020

It's a good time to visit the 200 DMA

The Iran hijinks are the perfect Black Swan, especially when China withdraws from trade negotiations later this month.


Charts have been banging the upper Bollinger Band on daily, weekly, and monthly time scales, dumb stocks like AAPL and MSFT have gone parabolic, perhaps we need to take a breather and visit the 200 DMA later this week at ~2980.

S&P 500 5-min, possible new channel

Friday had an ambiguous close, but if this is our new channel, we could make it back to test the 200 DMA by this Friday.  The 2008 tape suggests that could be a sharp bounce -- a gap fill back to 3183?


S&P 500 daily with 2008 tape overlay

If so, the next support would be 2725, presumably after "China trade" unravels.  Then the next bounce would be the FOMC at EOM -- another sharp swing.

3 comments:

christiangustafson said...

/es futures open red -- let's see if we can't close right at 3183 tomorrow to set up the gap play.

Prechter said...

This is the black swan - markets will be toast soon!

Time to buy a bunker and load it up with beans and bullets!!

T.Berry said...
This comment has been removed by the author.