Market Direction

Market Bounced. What is the Next

August 30, 2015

Market were full of drama last week. Huge downs followed by big bounces. After six days of huge drops, it bounced back big the next three days. Take S&P 500 as an example, It crashed 11.23% in six days from 2,103.47 to 1,867.08 then bounced 6.52% in the next three days and closed at 1,988.87 last Friday, recovered more than half of its loses. See its daily chart below:

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Our View for Coming Week: We are not very optimistic for the market this week.

  • Even the rebound was strong but it seemed tired last Friday. That is, the down move is much stronger than the rebound.
  • It is short term overbought using our own short term technical indicators and it touched its 10 day MA last Friday.
  • Its 50 day MA also crossed below its 200 day MA last Friday, called "death cross". This is a quite bearish signal.
  • Market did not make an additional move last Friday even Crude Oil and oil related stocks were strong that day.

We will find out where market will go this week. But it is most likely to see pull backs this week.

 

 

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