The S and P 500 seems to have put in a major top near the 2135 mark. After violating it's 200 DMA near 2074 it has broken down again below the 50 DMA near 2040 to about 1880 near last years lows. The summation index after a big move down is in negative territory suggesting market internals are deteriorating. No new highs in the summation index in over 2 years suggests an eventual break down in the market. Major support for the market is now near 1875. Resistance is close to 1920. Outlook is bearish midterm but we could see a short term oversold bounce.
Transports are under performing down near multi year lows this week. The #DOW transports are continuing to under perform the broader market over the last 9 months and bearish divergences in the transports are now spreading to the rest of the market. No new highs in the transports for over 9 months now, a major DOW theory non conformation which implies more downside in the market soon:
The #Vix is headed up and has held support near the 12 mark several times and has now briefly crossed the 25 mark. Still no new lows for the Vix in over a year and a major push upwards is under way and will continue post an oversold bounce in the market. As more time elapses the Vix is looking increasingly bullish which is bad for the market:
#Oil has broken down significantly lower below the 35 level. Further downside looks likely after any oversold bounces up to the 35 level.
The #Euro appears to be gearing for a bounce above the 1.09 level. The Euro is expected to come under more pressure following this with the 1.10 level acting as immediate resistance following a broad reduction in global risk appetite:
Indian markets have completed oversold bounces from lower levels but weakness in the Rupee
and surging Indian market volatility are concerns going forward and relative under performance appears to be on the cards. The #Nifty has made fresh lows below the 7600 level. The 8000 level is strong resistance now and support is seen only near 7400 on this break lower:
Taken together the above indicators suggest that following any oversold bounces, markets are susceptible to sudden bouts of volatility and downside in the upcoming months as problems in the US junk bond market and China will remain in the backdrop with bearish divergences continuing to pile up.
Transports are under performing down near multi year lows this week. The #DOW transports are continuing to under perform the broader market over the last 9 months and bearish divergences in the transports are now spreading to the rest of the market. No new highs in the transports for over 9 months now, a major DOW theory non conformation which implies more downside in the market soon:
The #Vix is headed up and has held support near the 12 mark several times and has now briefly crossed the 25 mark. Still no new lows for the Vix in over a year and a major push upwards is under way and will continue post an oversold bounce in the market. As more time elapses the Vix is looking increasingly bullish which is bad for the market:
#Oil has broken down significantly lower below the 35 level. Further downside looks likely after any oversold bounces up to the 35 level.
The #Euro appears to be gearing for a bounce above the 1.09 level. The Euro is expected to come under more pressure following this with the 1.10 level acting as immediate resistance following a broad reduction in global risk appetite:
Indian markets have completed oversold bounces from lower levels but weakness in the Rupee
and surging Indian market volatility are concerns going forward and relative under performance appears to be on the cards. The #Nifty has made fresh lows below the 7600 level. The 8000 level is strong resistance now and support is seen only near 7400 on this break lower:
Taken together the above indicators suggest that following any oversold bounces, markets are susceptible to sudden bouts of volatility and downside in the upcoming months as problems in the US junk bond market and China will remain in the backdrop with bearish divergences continuing to pile up.
Market Views for the Day http://t.co/SpkfrglNYQ pic.twitter.com/OywA9FVZeo
— samuelR (@RajveerRawlin) September 3, 2015
