Is the market due a bounce after yesterdays 500 point decline? Odds are very high on a short-term basis, a bounce is due…. just check out the VIX.
During these times I am of the belief it is can be helpful to look at long-term charts for a little perspective. I am of the opinion it is fair for us to ask….”Did the decline over the past 8 business days get us very close to long-term channel support?”
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I hope the markets don’t move any lower, yet as the book cover says…”Hope is not a strategy!”
Long-term channel resistance came into play earlier this year, which from a strategy perspective was suggesting to lower/harvest equity exposures up against long-term channel resistance. I suspect this resistance has had much to do with the market making little net progress since the February highs.
Farok…Honored to update the margin debt chart. Keep in mind two things, the data is a little slow in coming to us, about a 3 week delay and the level of the margin debt being this high, should take a good while to work off.
Hi Chris,
One of the main reasons for this vicious DOWNDRAFT, (and you predicted it very accurately), is the huge amount of margin debt,slightly below mid 2007 levels.Can I have access to charts or some info on how to monitor margin debt.If there is a dead cat bounce,can you produce a chart to show at what level the dead cat bounce will FAIL.
Thanks a million.
Thanks Chris…I was look at 950 for S&P500…how about that as possible buy target? If that channel support breaks then all bets are off.
Dealkiller….Great name!!! This would be my greatest concern per buying….The 500 and Wilshire have just recently broken the neckline of the H&S pattern/breaking the bottom of a 6 months trading channel. With the H&S in play, and the massive amount of margin debt, I suspect the downside will surprise way too many investors.
https://www.kimblechartingsolutions.com/2011/08/making-sausage-making-new-laws-and-wilshire-5000-update/
Long-term channels-
https://www.kimblechartingsolutions.com/2011/08/did-yesterdays-500-point-loss-in-the-dow-get-us-close-to-long-term-support/
Mid-range of the Dow’s 70-year channel still around 15% lower than right now….Dead cat bounce along the way? Sure for traders…one should be real careful IMHO.
Thanks for the comment and great question,
Chris
Chris, at what levels would you consider putting in a buy order or two on the S&P500?
JB….The two long-term charts are weekly.
Thanks for your viewership and kind words
I wish you and everyone all the best right now!
Chris
Chris,
Thanks again for the great work. These charts provide good perspective, albeit somewhat ominously given where true support looks to be, and I was wondering if they were weekly or monthly?
best,
JB