That's right folks, the recent selling pressure has the market average closest to the 200 day MA (exponential) since July. As it stands now we are about 2% above the key trendline, which rests at $104.79 on the SPY. At first glance it looks longer-term bearish, however, that's not the case if the market holds above this level of support. Odds are that this will be a solid level for value seekers to enter the market.
The argument is two-fold, it's trend based and volatility based. Take a look at both charts below–the S&P500 and CBOE Volatility Index both show that the market has 2-3 percent MORE to lose before finding a short-term bottom. Of course, if we break below the 200 day for two or three days I'll update the post as it would alter the outlook in a meaningful way.
Click on the images to expand
S&P500 Daily (200 EMA)
CBOE Volatility Index
Subscribe to this comment's feed
