Much like with the gold stock sector, there was support and then there was best support. SPX failed support today in grand fashion as it lost the 50 day moving averages. Best support is lower, however, at 2100 (+/-) as we have been noting for some time now in NFTRH.
This is an intact stock market, period. Woo hoo, the bears got some fun today. But SPX was probably always going to test the 2100 area when da boyz camed back from da Hamptins.
“The daily chart of SPX shows a touch of the 50 day moving averages, which can also act as support. Major support however, continues to be around 2100 and the weekly EMA 50 on the chart above (currently 2076 and rising).”
You know me. You know I spent a lot of 2015 and early 2016 bearish. I have not changed. The market is what changed. It changed to bullish when it crossed the weekly moving averages upward and created the noted support zone. When it fails that zone I’ll be more than happy to be a bear again. But this test – and that is all it is – was always going to happen; especially given the over bullish sentiment we’ve been tracking each week. Just like in the gold sector, the stock market was due for a sentiment clean out.
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