Week nineteen’s downtrend relentlessly carried forward this past week on heavy volume. It’s evident that de-risking/ re-pricing is underway, and long-term moving averages are being challenged. Indeed, the S&P 500 (SPY) fell a full -4.3%, breaking its 100- and 200-day EMA’s. Of course the SPY was eclipsed by another two points by the higher beta International (EFA) and Small-cap Style (IWM) stocks.
While equities should be coming into a technical support zone, sectors are broadly oversold, and volume looked capitulative on Friday — options expiry makes that volume difficult to interpret, we’ve yet to have a signature “big whoosh” reversal, and news flow is taking clear precedence over technicals.
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