Nov
S&P 500 Short Term – In a New Downtrend
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On this daily bars chart, we see that the consolidation that I mentioned in my last post moved swiftly into a new downtrend. On last Tuesday, price crashed down through S4 and S3, and pretty much held at S2, price closing above S2 on Tuesday and Wednesday. So, price is breaking supports while holding below resistance. This is the classic Midas definition of a downtrend.
So far, on the longer timeframes – weekly, monthly and quarterly bar charts – price has not moved far enough down to start new downtrends. However, as I pointed out two weeks ago, price had come up to significant resistance on all of these timeframes, a most unusual occurrence, and now the short term has turned strongly to a downtrend. So, I wouldn’t be surprised to see the downward motion continue and establish new downtrends on the longer timeframes.
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