Weekly Market Commentary: Long Term Trends Crack
The S&P finished the week with a low just above a former resistance level - turned support - of 1,062.
The loss was more stark in the Nasdaq which gave up almost 8% on the week. Drawing in Fibonacci retracements sets two targets; former resistance turned support at 2,020 (61.8% @2,050) and 1,759 (3.2% @1,751) with a seasonal timeframe of September/October for the lows.
The Percentage of Nasdaq Stocks above the 50-day MA had a shocking 58% decline on the week; jumping from overbought to oversold in short order. But technicals will have to do likewise before a bottom of consequence is in place. For now there is a 'Confirmed Sell' trigger
The same was true for the Percentage of S&P Stocks above the 50-day MA as it lost 79%. The closest decline to the one of last week was in early 2007; back then the markets rallied to new highs - will it be repeated here?
But the biggest hit on the week was to Small Caps as it lost close to 9%
Next week will probably start weak as last Thursday's lows are tested. From there a counter rally may materialize, but look for volatility to drop - perhaps producing a triangle consolidation off the counter bounce.
Whatever happens, last week was quite something to end a rally.
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