Thursday, August 25, 2016

S&P 500 Closing Below 217.68 Watch Out

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*News and technicals are causing the S&P 500 to break down.
*Fed Chair Yellen's speech Friday may be a change in the "stimulus" story.
*We'll know if the market sees it as a change based on a simple confirmation.

We wanted to look at market action and help define to see if the market is keeping the trend or changing in trend. We identified a key multi-week support-resistance line that the market is toying with right now. The Fed speech tomorrow may be decisive to get the market to confirm below this line. That would imply a new direction in the medium term.
Quick Review
On August 15th we concluded, "That may give support to markets this week." The markets held last week.
Through last week though the Fed's tone turned much more hawkish (Fed Hawk And Bubble Talk). This Sunday we had a confirming hawkish speech by Fed Vice-Chair Stanley Fischer. (Blindsiding Rate Hike Slipped Into Yellen's Speech)
This Sunday, August 21st we changed due in part to the Fed and said, "Expect Down Stocks."
Just because we expect down stocks doesn't mean the market always listens. We want to see the market confirm for us in action.
We may be at the precipice of confirming a new trend, this time a down trend in stocks. If correct this would be the first down move since the Brexit vote so should be important.
We want to precisely define what will confirm a down trend for us.
Here's the chart we're looking at. This is the S&P 500 ETF (NYSEARCA:SPY). This is the most important security to follow in the world because everything is correlated to the S&P 500. That correlation phenomena makes this the critical measure to define the market.

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

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