In closing below 1411.63, $SPX not only confirmed that last Friday’s Doji was a reversal Doji but $SPX took back almost all of last week’s gains. It appears we’re set up for a pull back of one degree or another. Last week’s pull back lasted just two days and that might be the case this time.
Today’s nearly 7pt drop was not enough to trigger any ‘sell’ signals so, IMHO, the market remains a ‘hold’ at this time.
On the chart below, you can see that $SPX is now trading below the rising trend line. That trend line was always too steep so once we find out if the market is truly going to roll over or if it’s just pausing before the next move up then I’ll move the trend line. Also, the RSI 14 has broken its trend line, which was too steep, as well, and I will adjust it too. I don’t have a problem moving either of these trend lines as long as the recent low of 1343.35 holds because until then we’re just looking at a higher low type of situation. Should 1343.35 give way before the market stabilizes, then that’s another story. But we’re not there yet.
ISM number and the stand off in D.C. certainly had an impact on the markets today. No idea what will move the markets tomorrow.
GL & be careful