Market Outlook™ – 10/08/19
Today’s Market Outlook:
[With Brandon out of town this week, we will have new Market Outlook videos on Monday, Wednesday and Friday. The paragraph below reflects what occurred in markets today, Tuesday the 8th. But, the video below is from Monday with the material mostly still very relevant]
With above-average trading range and volume, the S&P 500® finished lower by nearly 46 points. The intermediate line continued lower into the chart’s lower half. The near-term line also fell below the 50th percentile after spending only 2 days above the chart’s midpoint, including one of those days in the upper-reversal zone. The momentum line dropped down to extremely low levels. Long-term Market Sentiment moved lower too but still sits in the chart’s upper half.
The S&P shows 2 red arrows – on its 30-day SMA and MACD with its histogram moving lower again. Despite the extreme weakness ($TRIN finished greater than 2), the S&P remains above its 200-day MA as it trades within the lower end of last week’s range. The broad market has fallen back down to its one-year point of control. This renewed weakness was expected due to seasonal trends and last week’s late, quick bounce to resistance. Nothing suggests that this week’s selling is breaking support and starting an extended bearish trend…yet. There is intraday support near $288 and volatility sits near the 100% level of $VIX3M. This is hardly a surge that would suggest a Market Sentiment pullback.
Until we see these red flags turn into something more substantive, the expectation is that support will hold and equities will recover going into a seasonally bullish time of year.