I published technical analyses on the Dow and S&P 500 charts a month ago this week. I will paste those charts and analyses below and update new charts and analyses with the assistance of my poker dogs. Opinions of how, why, and where the stock market is headed are flowing like Niagara Falls across the financial hemisphere following yesterday’s and today’s swoon at the Bucket Shops. I selected a few articles, quotes, and one interview to peruse before dipping your heads into the charts.
The great TaperCaper rolls onward while our new Fed Chair, Jay Powell, and the financial presstitutes yucked it up yesterday during his first post-FOMC press conference. Heck, there was not a question asked of Jay about the current LIBOR rates debacle, and we thought Yellen’s Q&A pressers were sh*t-shows? Ever since 2011, the Fed’s economic projections have performed worse than desired. Consider the current GDP projection from the Atlanta Fed for 1Q18 where the initial projection was 5.4% last month, now revised down to a paltry 1.8%. Inflation is unable to break the 2% barrier. Retail sales have been in the crapper for three consecutive months, as delinquencies on consumer revolving credit are on the upswing. Meanwhile, the Fed continues to jawbone inaccurate models to justify higher interest rates, with one quarter-point piker’s at a snail’s pace since December 2015. My brain is exploding, so let’s get on with the charts!
The next recession could be worse than the Great Depression… “Consumer spending is beginning to slow, debt is skyrocketing and savings are low. GDP is slowing down and the political backdrop could make that worse.” – John Mauldin, Mar. 22
Another US stockmarket domino has toppled… “The ‘Fang’ stocks – Facebook, Amazon, Netflix and Google – plus the likes of Apple and Nvidia, have almost been propping up the US markets by themselves. But now we have Datagate, can this continue?” – MoneyWeek, Mar. 21
“Not sure how people are perceiving this as a ‘dovish’ hike. If anything, this is more hawkish, they’re just giving themselves more wiggle room to slow down hikes if/when economic conditions weaken over next 18-24 months.” – GeneseeCapital, Mar. 21
Mr. Powell, the Spotlight Was On You… “The FED‘s triple mandate will not sit well with its detractors in Congress. This makes the unasked question about the LIBOR/OIS spread even more relevant. Now, about those tariffs.” – Yra Harris, Mar. 21
Lance Roberts speaks with Nomi Prins, author of “Collu$ion: How Central Bankers Rigged The World.” The book ‘casts an unflinching spotlight on the dark conspiracies and unsavory connections within the halls of power.’ Lance and Nomi also talk about the Federal Reserve’s decision to raise interest rates and the reasons behind it.” – Mar. 22
“If today’s market slide is all about tariffs, the Fed and Facebook, why are 8 of the 11 SPX sectors in the red and the financials the very worst performer? Maybe, just maybe, Mr. Market is taking Mr. Powell on regarding the comment on how the economic outlook is strengthening.” – David Rosenberg, Mar. 22
“This decline isn’t about the Fed. It’s about Trump and the elites trade policies.” – Jim Cramer, Mar. 22
Stocks Plunge As Trade Turmoil, Credit Crisis, & Tech Wreck Loom… “All of a sudden, ‘stuff’ matters: Powell hawkish, Trump lawyer resigns, Trump trade wars start, Funding market stress surges, Credit markets spike, Facebook new lows, Tech tax and regulation.” – ZeroHedge, Mar. 22
US, Asian Markets Plunge As China Responds To Trade Wars… “Following the earlier threat from the Chinese embassy, the first retaliatory trade actions from China are emerging and US and Japanese equity markets are in freefall.” – ZeroHedge, Mar. 22
$SPY SPDR S&P 500 ETF Daily Feb. 23, 2018 Close…
“A bullish Cup & Handle pattern has evolved since the low put in during the recent market correction. The price has retraced back above all the Exponential Moving Averages (EMA) and back above the 23.6% Fibonacci, following the pivot off the 200 EMA. Large buying volume came back into the market, relative to the overall falling volume pattern seen since this multi-year bull run began. The StochRSI has spiked upward into positive territory. There is high potential for a retest of the all-time high. Keep your eyes on the veracity of price action if the Rim-Line of the Cup & Handle is taken out. The downside comes if any news breaks that’s perceived as bearish in the near-term or Jay Powell drops a few hawkish headlines at his first congressional testimony on Tuesday. No matter how it plays out over the next few days, any retest attempt could fall short and/or morph into a bearish Double Top. Stay on your toes if you trade this poker hand.”
$SPY SPDR S&P 500 ETF Daily Mar. 22, 2018 Close…
The Cup & Handle from Feb. 23rd did break out of its Rimline, with a one-day 40pt gain, without a continuation by failing the next day. Price action over the course of that week ended with a solid pivot off the 100 EMA and attempted a retest of the January high without success. We do have the ingredients of a potential Double Top. With the wave down since Mar. 13th, a trendline drawn up from the Feb. 9th low was taken out decisively, and a bearish Big M pattern has formed. With today’s 724pt plunge, the 100 EMA is decisively breached, with the price putting on the brakes at the 150 EMA, slightly above the 23.6% Fibonacci. Today’s downside Soldier Candlestick sets the stage for the potential of more downside price action. The 200 EMA would be the next bus stop, and if momentum continues further, a visit approaching the Feb. 9th low, or possibly the 300 Simple Moving Average (SMA) and 38.2% Fibonacci are all in the cards. The studies are bearish across the board, with a negative Alligator Tongue set-up on the DMI-ADX, the StochRSI is bouncing along the bottom of an oversold condition, the Momentum Indicator is going south, and Volumes are falling on each price move up, while increasing on each price move down. Outlook for the chart is Bearish.
$DIA SPDR Dow Jones Industrial Average ETF Daily Feb. 23, 2018 Close…
“Analysis on the $DIA is identical to the $SPY. The only exception is the DIA pivoted off the 150 EMA instead of the 200.”
$DIA SPDR Dow Jones Industrial Average ETF Daily Mar. 22, 2018 Close…
Again, analysis on the $DIA is identical to the $SPY. Outlook for the chart is Bearish.
Plan Your Trade, Trade Your Plan
TraderStef on Twitter