Our daily SPX chart shows the recovery that was made after the severe drop. We can also see some resistance around $1920 and $2000.
The weekly SPX shows after a crazy week we are in a very similar situation as we were last week.
Although the daily BPSPX is showing a rebound, the 200, 50 and 30 MAs are in bad shape.
Finally, the weekly BPSPX. As with the weekly SPX chart, this clearly shows the rebound means nothing right now.
Although, the daily charts are showing a reversal of the downtrend, the weekly charts have not changed. The risk of more downside is extremely high and now is not the time to risk getting back in.
We would not be surprised by one or two up days next week before the downtrend continues. We expect the $1820 level to be tested again.
- If still invested... tough choice here. For passive investors, get out now... for aggressive investors, it may be worth staying invested and play for the recovery.
- If you're in cash, stay on the sidelines as some whipsaw action is to be expected this week. There will be plenty of time to get in later.
- Run scans and start looking to invest in strong patterns. Do not forget to have a STOP LIMIT for open positions.