Weekly chart:
Once again, the S&P 500 has abandoned the movement it had begun and has virtually equalized the candle from the previous week. This is not a good sign, and means that the chances for the coming week are definitely more on the low side.
Daily chart:
In trading according to the Dow theory, there is a basic principle: a break in the trend is a long way off from signaling a new trend. We can observe that this week in the daily chart. The preceding downtrend was broken last week, whereupon I wrote that a return to the 20 location point line (LP) would be desirable. And the market did indeed fulfill my desire this week. It did this, however, in a speed that indicates continuously decreasing prices in the coming week. This would mean that the supposed trend break was only a picking-up of the stop at point three, and that the red downtrend is indeed going to continue. In the best-case scenario, the buyers will come back into the market at the 20 LP from the daily chart.
Hourly chart:
The hourly chart is showing the current drama and sell-off. The red trend is relatively young and is far in the movement. At the beginning of the coming week, a correction back to the two LPs from day and week and/or into the blue correction zone will presumably occur. Here it will then be decided whether the downtrend will continue.
All the best
Markus Gabel
Head of Sales/Trading
AgenaTrader/TradeEscort
AgenaTrader Trading Software
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