Call me a perma bear but the chart shows. Temporary correction needed.
RSI has fell below 3 hour rising trend line, combined with a potential massive influx of volatility in the overall market due to the bull trend from the March lows.
VIX is showing signs of life, while some stocks are at record highs. If anything formulates from this, volatility and sky high...
Those blue lines are the money makers. Watch for a daily close above or below either and ride it up or down for a bigger move either way, but potentially much more of a fall below.
Economic picture looks cloudy. Unemployment may be trending up. Getting close to election.
In the chart above you can see the RSI support and resistance trend lines. If the current rotation/pattern follows, a correction could potentially occur within weeks.
As you can see, our rising trend line for support has been crossed for RSI. Watch for it to close below the trend line, then potentially move back up to re test it as resistance. Expect a 5-15% drop if it fails to break back above it as resistance.
As you can see from prior experience we have an ascending RSI trend line of high lows until we reach a capitulation point. In both examples we also had a short run up prior to a significant drop. If you back test this over the last couple years you get a correction of anywhere from 3-35%
With any substantial drop, fear could be brought back into the market and...
As you can see we are still in the range of the highs and lows since the start of the breakdown earlier this year. Until we break that resistance line I still see potential for this to go either way. To continue going higher from here it would take a lot of volume and increased strength which is already waining from the run up we've had in the last couple weeks.
Top green resistance line is from the market peak at the beginning of this year, through the recent spikes, to where we are now.
Jobs report tomorrow. Estimate is 3 million jobs added back. ADP was below analysts estimates today by a couple hundred thousand.
Is the market does not make any major move up, it will only get harder to remain afloat when earnings...
In the chart above you can see a head and shoulders pattern that also lines up with other indicators in different time frames, ie: daily MACD reversal signal. The chart, and head and shoulders pattern also lines up with the previous highs that are now resistance.
