By Jared A Levy
Watching yesterday’s market action, I realized that we are indeed in a bearish trend. I noted this a week or so ago in my article referencing technical indicators that were recently violated to the downside.
As the S&P 500 Index (SPX) continues back toward its July lows, which are just above the 1,000 mark (1,010.91, to be exact), many technical analysts – including me – are concerned about a continuation back to that level. There currently doesn’t seem to be much technical support from the current SPX price down to the July low.
Ever since the dreaded “death cross” that occurred in July, I have been monitoring the price action of the SPX (partially to check the validity of the cross). After the cross occurred, which you can see in the chart below, the index actually rallied.
The 200-day simple moving average (in yellow) crossed above the 50-day simple moving average (green) early on. The exponential 200-day (red), crossed the 50-day later in the month. Regardless of which trendline you prefer, the index will view these cross points as levels of potential resistance.
