Stocks Break Lower

August 12, 2019

While stocks did form a swing low on Thursday, they were contained by the double resistance of the 10 day MA and the 50 day MA on Friday.

Then stocks broke lower on Monday.

Stocks printed their lowest point on day 44, placing them deep in their timing band for a daily cycle low. We needed to see a close above those two moving averages for confirmation of a new daily cycle. Instead stocks were rejected by the convergence of the 10 day MA and the 50 day MA. And with stocks forming a swing high on Monday that signals a cycle band sell signal. Stocks are in a daily downtrend. They will remain in their daily downtrend until they can close back above the upper daily cycle band.

One response to “Stocks Break Lower”

Alex

August 13, 2019

spread btw 10y and 2y Ts now at +0.05%! It may turn negative by Friday –> US recession is close!

It is interesting to notice that SM toped before the 10-2y spread got negative; usually it is the other way round — maybe the US protectionist measures hurried the recession in the last Presidential year and moved SM top sooner than the spread become negative.

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