Vote! If you haven't already.
So, what to expect? Up?, Down? How about both? I'm expecting the latter and a period of volatility. With so much hope and expectation there is bound to be extreme emotions as everyone's preferred outcome can and will not be met. Add the potential for an ambiguous period to sort out any close outcome and the recipe for volatility is delivered.
This month I'll provide two perspectives:
1. an update on progress based on 14 historic declines tracked in my prior monthly charts,
2. a technical perspective based on Fibonacci levels and related Moving Average support areas.
In both cases the current market level has an appearance of near term weakness, but with intermediate/long term uptrend. A non linear decline is expected before we head higher. Current levels are oversold with stocks > 20 day average = 21.60% (MMTW), where anything below 25% typically provides support. Thereafter, the primary trend higher is expected, but not before a bounce and further decline.
1. We are now entering week 25 of 52 for the rebound since March 2020 (near 1/2 way done). This is the 15th event compared to 14 previous historic market declines of similar magnitude (see prior month's chart and comments).
* Average of prior 14 events: +16.07% after week 23
* 2020 as 15th event: +10.64% after week 23
Note the "Start" yellow arrow for comparison at the MACD /Signal crossing event on 5/18/2020 (Red arrow under PPO).
The Average gain for the 14 historic events at week 52 (forward from time of MACD / PPO crossing) is +34.44% shown using a second Yellow arrow at May 2021.
The current recovery was trending above average until last week, and now sits below average with room to improve to reach the 52 week goal of +34.44%.
2. Related technical indicators provide support targets for any near term weakness. RSI 14 has declined to near midline (50.55, Red Arrow), and is monitored for further decline to 30.00. SMA levels of 50 weeks and 200 days are found at 3129-3139 along with Fibonacci .786 retracement at 3136 using March 2020 decline as bottom. Potential for decline to 3054 as a further safety level coincides with using Fibonacci levels dating from Feb 2016 to Feb 2020.
While current oversold levels may lead to a short term bounce, further caution for lower levels is prudent given election volatility. Now Vote!
So, what to expect? Up?, Down? How about both? I'm expecting the latter and a period of volatility. With so much hope and expectation there is bound to be extreme emotions as everyone's preferred outcome can and will not be met. Add the potential for an ambiguous period to sort out any close outcome and the recipe for volatility is delivered.
This month I'll provide two perspectives:
1. an update on progress based on 14 historic declines tracked in my prior monthly charts,
2. a technical perspective based on Fibonacci levels and related Moving Average support areas.
In both cases the current market level has an appearance of near term weakness, but with intermediate/long term uptrend. A non linear decline is expected before we head higher. Current levels are oversold with stocks > 20 day average = 21.60% (MMTW), where anything below 25% typically provides support. Thereafter, the primary trend higher is expected, but not before a bounce and further decline.
1. We are now entering week 25 of 52 for the rebound since March 2020 (near 1/2 way done). This is the 15th event compared to 14 previous historic market declines of similar magnitude (see prior month's chart and comments).
* Average of prior 14 events: +16.07% after week 23
* 2020 as 15th event: +10.64% after week 23
Note the "Start" yellow arrow for comparison at the MACD /Signal crossing event on 5/18/2020 (Red arrow under PPO).
The Average gain for the 14 historic events at week 52 (forward from time of MACD / PPO crossing) is +34.44% shown using a second Yellow arrow at May 2021.
The current recovery was trending above average until last week, and now sits below average with room to improve to reach the 52 week goal of +34.44%.
2. Related technical indicators provide support targets for any near term weakness. RSI 14 has declined to near midline (50.55, Red Arrow), and is monitored for further decline to 30.00. SMA levels of 50 weeks and 200 days are found at 3129-3139 along with Fibonacci .786 retracement at 3136 using March 2020 decline as bottom. Potential for decline to 3054 as a further safety level coincides with using Fibonacci levels dating from Feb 2016 to Feb 2020.
While current oversold levels may lead to a short term bounce, further caution for lower levels is prudent given election volatility. Now Vote!