Last week, the S&P 500 produced multiple warning signs of a coming selloff.
the S&P 500 produced multiple warning signs of a coming selloff. Was it what the Federal Reserve said? Likely, not. The breadth and depth of the indicators make them significant and serious.The backdrop
Last week’s actions don’t stand alone. A negative backdrop has been forming since the S&P 500 topped out on July 31. It rolled over in early August, forming a rounded top and falling below the 50-day moving average (a trend measure) on August 15. It then bottomed on August 17-18 and rebounded halfway back, rising above the moving average.
However, it then topped out on September 1 and see-sawed around the moving average that was slowing its rate of rise. Then, last week happened.
This graph provides the picture…So… Are those moves a downtrend forecast or simply volatility in action?
Next week’s stock market action should answer that question. It will be an especially important and interesting period because all five days close out the third quarter.
Moreover, the week sets the stage for the coming earnings report season that begins with the major banks two weeks later (Friday, Oct.
