We had a rather bearish drop of 3% yesterday. Since im on a half day leave today I decide to take a look at the long term charts.
What I don’t like about it is that on the MACD it shows a clear sign that it is Failing the zero line and it went from cutting up to springing down.
MACD does give a very delayed signal and what I feel is that from past movements like this, when the indicators have reached such an extend, the selling is almost over. Still we have one instance in 2008 where a test of the zero line and a failure brings about a drastic downward move.
The area of 1046 on the S&p 500 is important since we have 2 major change in directions there. That couple with that it is near the 50% retracements from the 2007 bull market highs indicate that this is an area that we need to watch for support and resistance.
Next support I will watch for is around the 970 region.
Actions
For my dividend stocks, this long term indication seems to suggest more downsides. But for all you know the movement these days might very well be noise.
I will be watching the market movements these days. If need be I will pare down the holdings in these stocks.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory firm Providend. All opinions on Investment Moats are his own and does not represent the views of Providend.
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