The “Exponential Moving Average” spoke on Friday, August 21.
That is, the DJIA’s 15-week EMA closed below its 40-week EMA, which signaled a
change in the intermediate trend from bullish to bearish. Since this is a
weekly signal, any price action that happens during the week is considered
“investment noise.” That is, these daily
price movements are an annoyance that must be put up with until the close of
the market on Friday. However, Homo sapiens being an impatient lot do not want
to wait until Friday. Therefore, my best guest is that we could see more early
selling pressure Monday morning, which would be a continuation of Friday’s
selling along with early selling pressure coming from Asia markets on Monday.
However, I would not be surprised that early selling would lead to a price
reversal that actually leads to the market closing higher on Monday. Then, the
market could stage higher prices through Wednesday. A sharp sell off Thursday and Friday, which
would test Monday’s low.
Update: As of 11:30 PM (EST), the DJIA's futures are down over 400 points. Definitely looks like a rough start for the market when it opens on Monday.
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