Stock indexes, including S&P 500 have been going
up since 2009 with no major reversals since 2013. Looking at a weekly chart we
can see that the picture might be turning bearish bit by bit. You can clearly
see that since February, 2015 price wasn’t really advancing upward. On the
contrary, a visible head and shoulders pattern is present on a weekly chart. 2120-2150
was the area where price of the index would be rejected again and again. This
can lead us to a mildly conservative conclusion that a collapse in stocks might
be coming sooner rather than later.
We would not claim that if there were not any signs
of that. But now signs are there clearly seen on the weekly chart and price
action confirms an upcoming crash. It would be difficult to say how far and how
fast the price will go, but taking into account all uncertainties in Europe
with countries compiling huge public and private debts (US leading the way) it
might be time to quite trading risky assets and jump into more conservative
ones like gold or Swiss Franc.
We can also see that 50 sma on a weekly acts as
support, but nobody can be sure for how long.
S&P 500
weekly chart
A
daily chart also displays an attack on support where 200 sma and ema indicators
are. In fact, we might see a daily price close below these two important
indicators. That would be a very bearish signals. We did see two of those
within a year and nothing really happened. But again, you can never know when the signal
will work.
Anyway,
more and more bearish signals appear in the market and not only S&P 500,
but European, Asian and other stock markets will turn down soon. Chinese
Shanghai index could lead the way as the Chinese government is trying to slow
down the collapse now. I doubt if they are able to combat powerful forces of
financial market. So, let’s wait and see what happens.
S&P 500
daily chart
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