Technical Damage

Here are the charts of the major US stock indexes, using daily price bars. They are presented in order from strongest to weakest. If you only considered the Nasdaq, the S&P 500 and the Dow, you’d be much more confident that support at the lows of 9 August might hold. However, the charts of the Russell 2000 and the NYSE Composite Index would strongly argue that support at the early August lows is more likely to fail than to hold—at least eventually, even if it holds temporarily.

Also strongly arguing that support will eventually fail are the Elliott Wave structure, the technical indicators at higher time frames, the break down of key trendlines and the high momentum of the downmove.

Of course, technical analysis can only provide relative probabilities, not certainties. The market is always right. Believe what you see.

NDX (Nasdaq-100 Index) | Daily Bars

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SPX (S&P 500 Index) | Daily Bars

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TMW (Wilshire 5000 / Total Market Index) | Daily Bars

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DJIA (Dow Jones Industrial Average) | Daily Bars

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RUT (Russel 2000 Index) | Daily Bars

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NYA (NYSE Composite Index) | Daily Bars

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One Response to “Technical Damage”

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