Tuesday, September 01, 2015

Market Index Report: Downward Channels Abound, Breaking 1900 Tomorrow Opens A Fall to 1840

The correction is proving deeper and wider than I imagined and downward channels abound. Even as I write this, the S&P accelerated it's losses 1% in the last half hour. A convincing break was not made below 1900 on the S&P which for me was a crucial support area. What does have me concerned are my RSI and stochastic indicators with the RSI not yet showing oversold conditions and the stochastics looking like they are just getting started. Could this really correct down towards 1820-1840? Longer term the S&P could go back to 1300 but this will not materialize until April/May of next year. I'd like to think that two weeks ago we were due for a pullback and I stated in several posts that this was the case but a crash on the scale we have witnessed is going far beyond what I ever imagined being able to take place. The last twelve trading days or so have left me truly gobsmacked and quite fearful of what awaits us as October roles around. What will the jobs report on Friday show?

After today's bloodbath I would be quite pessimistic of a continued fall to 1820 on the S&P if we had a snap back tomorrow, so near the close today I sold my short positions and just hung onto my natural gas longs. I have no idea where we go from here. To be honest, I'd just take it day by day because no clear medium-term trends have emerged. 

This evening I have decided to post my charts without any current recommendations but with my RSI and Stochastic indicators to try and help show where we are now. At least my call on Monday to go short on the S&P was correct.


 U.S. Dollar: $USD

Biotechnology: IBB

China: FXI

Consumer Staples: XLP

Emerging Markets: EEM

Energy: XLE

Real Estate: IYR

Russia: RSX

Semiconductors: SMH

Transportation: XTN

U.S. Treasuries: TLT

Jakob Richardson © 2015