After a severe drop in August, market is undergoing a consolidation phase also know as absorbing the move. It is moving in a range as if waiting to make the next move. What will be the next probable move? BPNYA well below EMA(30) while Volatility ($VIX) remains well above 20 mark for now, both suggesting caution. Daily NYSE chart is displaying triangle formation. As market is gyrating in wild swing, it is forming a triangle and a decisive move outside the triangle will be probable direction of next move. Also MA(50) has crossed MA(200) in August also known as "Death Cross" and is typically a bearish trend sign. Weekly chart are suggesting that market might be near a possible support area. It should not be a surprise if market continues to remain range bound for a while. RSI is barely above oversold territory and MACD is trending down. NYUD is way below EMA(21) and EMA(42) suggesting market to be in a clear bearish mode. RSI is barely above oversold territory but DO NOT get fooled by it. Charts are telling us that market can remain in a tight range for a while before making the next move. The most probable direction of next move could be in the direction of the slide, but WHY? Historically, month of Sept-Oct are considered bearish for the markets and it shall not be a surprise if market takes another dip marginally breaking the lower low established in August. This could happen as a reaction to FED action which will be revealed during FED meetings this month or next. Better be aware and prepared than get ambushed, Isn't it!!!
What does it mean for our Investments?
Market in bearish mode, get out of the way... Comments are closed.
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