Stocks continue to fall, as the downtrend that began at the end of July persists (red lines on the chart in Figure 1). New relative lows were made again this week, so the pattern of lower highs and lower lows is evident. That defines a downtrend, and it also warrants holding a "core" bearish position.
Join Larry McMillan as he discusses the current state of the stock market on October 2, 2023.
The $SPX Index broke down through 4330 a week ago (Friday, September 22nd), tried to rally back above it for one more day and then gave way to a sharp selloff. Thus, 4330 was not only a crucial support level that has now been broken, but it is also going to serve as resistance. There are a number of things going on right now in the market, but as you can see, there is now a downtrend (red lines in Figure 1) -- lower lows and lower highs. That is a full-fledged bearish trend, not just minor correction.
Join Larry McMillan as he discusses the current state of the stock market on September 25, 2023.
Join Larry McMillan as he discusses the current state of the stock market on September 18, 2023.
The week after September expiration (i.e., the week after the third Friday of September) is historically a very negative week for the market. In fact, last year, that week saw a 180 point decline in $SPX, the largest point decline that we have seen in the 33 years that we have been using this indicator. It was not the largest percentage drop in a week for this system (that occurred in 2011).
The market is still struggling to find direction, as it remains mired in a narrowing trading range. The "outside" parameters are support at 4330 and resistance at 4540. I continue to feel that a move outside of that range will generate significant, tradeable momentum for the broad market. However, $SPX has recently been trading in an even narrower range than that, after having found some support near the 20-day Moving Average, at 4450.
Join Larry McMillan as he discusses the current state of the stock market on September 11, 2023.
Stocks recently ran into some trouble at the 4540 area on the $SPX chart, after having bounced strongly off of the support at 4330 in mid-August. So, those two levels are what is containing the market at the moment. There is further resistance at 4600 and further support at 4200, but it seems to me that those 4330 and 4540 levels are what is going to determine the next breakout and thus the next move with decently strong momentum.
