Market Outlook – 03/23/18 – David Settle
The intermediate posture for the S&P 500® is increasingly bearish with today’s second consecutive 2%+ drop. Its intermediate and Market Sentiment lines are both falling but still above the 50th percentile. Short-term sentiment is extremely low with the momentum line staying at extreme lows for a third straight day and the near-term line nullifying a potential bullish near-term divergence with its own lower low. In fact, the near-term line hasn’t been this low since late 2015. All previous times the short-term sentiment line has fallen to current levels prompted near-term recoveries. If and when Market Sentiment falls below the chart’s midpoint, it will provide the first low point since November 2016 – the low that started this 15-month rally that currently ending.
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