The market is currently in a short term 22-day consolidation.
We currently have a double top and considering the futures, we will probably hit a triple top.
What is interesting to note is the recent $3 trillion aid package did not have an extremely positive effect on the market, unlike those previously.
Looking at the advance-decline ratio we see that the Bullish appetite is diminishing, meaning the extremely bullish days are losing their power.
RSI is neutral suggesting a potential turn-around.
Finally, the KST indication is crossing over at the suggesting the market is running out of steam.
At some point, the market participants will realize that there is a serious economic decline ahead. My guess is a triple top, decline, panic selling, and another bottom.
“You will get business failures on a grand scale.” So declared James Bullard, president of the Federal Reserve Bank of St Louis, on May 12th. Peter Orszag, a former official in Barack Obama’s White House and now with Lazard, an investment bank, warned that the American economy could face “a significant risk of cascading bankruptcies”.
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Thanks
Barry
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Knock knock knockin on heavens doooooor. Wa wa wa wa wa :) Overhead resistance at 3,000 (triple top) is holding strong, but for how long? A strong breakthrough here and I am lonnnnng. Psychological Pivot Point.
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A close above 3000 might happen today. The 3000 resistance might become the new support. But we see the market at a key pivot point. I am neither long nor short at the moment waiting for a new firm direction.
Excellent Market Overview, Barry.
Thank you for the information.
MystryBox
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I agree with your analysis, but the bullishness from the market, especially the overnight pajama-traders is striking.
m5b11
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@MystryBox, someone needs to buy so the big players can dump
liberatedstocktrader
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@m5b11, the big players are buying. Thats what moves markets, not the little pyjama traders.
oranjcrush
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Frankly, today's market was a direct response of the first credible source (not Trump on campaign) of a legitimate hope for a vaccine which is the turnkey for the economy.
While today was extremely bullish, it was well outside the trend and will only really affect longer term levels if the bullishness continues for the week without a drastic pull back.
Outside of TA, the next few months has much more potential downside in the market than upside. The big 'winners' of COVID are already overinflated and overbought by most indicators. Today was first day we saw widespread buying in mid/small caps. How long will that last with the latest estimates saying 40% of small businesses will go under due to the knock on economic affects of the crisis? How long will investors be okay with paying premium for stocks that have horrible earnings and horrible outlooks in the middle of a credit crisis?
@oranjcrush, I recommend doing some further research on this so called vaccine. It’s nothing to cheer about.
MystryBox
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The main thing bullish is a handful of megacap tech stocks, dragging up the S&P500 while taking the Nas and Nas 100 right up to all time highs. It's stunning.
Meanwhile treasury yields are still going sideways, not agreeing with bull thesis. Emerging markets still hammered and not agreeing with bull thesis. Russell 2000 still hammered and not agreeing with bull thesis. Economy crippled and not agreeing with bull thesis... but 2nd quarter GDP doesn't start coming out until July. Maybe we can rally another month?
This is insanity, we're going to run right back up to another crash.
@liberatedstocktrader, VIX still high and in bear territory not agreeing with bull thesis. Everything says this is a bear rally, but it's the most viscous bear rally ever.
Thank you for the information.