Can’t find anything really compelling out there. The markets need more time to set up for another move. For now, I see two things pointing towards different outcomes.
- Continued selling pressure and confirmed downmove with the Shanghai Index
- Potential reversal candles with the US Dollar and the Euro
The Shanghai Index displayed early signs of weakness a while back and was seriously lagging the S&P 500. Today’s weakness and the inability to break out to the upside confirms that weakness. Looking at the chart, the Shanghai Index could easily fall another 10% until it hits decent support levels.
Up-to-date Shanghai Index chart on my public list.
On the other hand the daily candles of both the US Dollar and the Euro show potential signs of reversals. Both candles show long tails. Technically speaking a sign of not being able to hold the highs and respective lows printed during the day. If the US Dollar was to move down from here it would certainly ease selling pressure with stocks.
Lots of signs of indecision and conflicting market signals. Mixed signals and indecision are signs for me to keep my overall market exposure at extremely low levels and to patiently wait until I start being aggressive again.
I’ll end with a quote I completely agree with. Actually ‘Never call a company for more details’ has been part of my trading rules for quite some time.
I will never understand why people phone the investor relations department at companies to ask about the business. Do they expect company staff to tell them bad things? – Tyler Bollhorn
My public list with all my charts can be viewed here:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2791469
Buenas noches!
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