Things are finally starting to look toppy in the stock market. The Dow Transports has historically been something of a canary in the coal mine for the broader market, and it's been in decline for a few weeks.
The NASDAQ, meanwhile, has gone basically nowhere since February. Also, it looks to have made a triple top recently, a bearish signal. There's serious resistance at about 14,200, and it just can't punch through.
I estimate support to be somewhere in the 13,300-13,500 range. If it drops below that, well, it'll probably be a long way to the bottom.
The S&P has been in a bullish pattern all year. The past four sessions, though, have all been in the red, with the last one closing below the 50-DMA, so this may be the beginning of the end of the uptrend. Then again, it broke the 50-DMA back in March, too, and nothing became of it, so who knows...
Now, I should state for the record that I'm terrible at market timing. I've only successfully timed the market once in my life. So I'm probably wrong here, too, about the market having topped out. There might be weeks, months, or years of a bull market left to go.
But you might want to keep a close eye on your stops just the same.
No comments:
Post a Comment