Direction- the SPY is bearishly moving sideways in its trading zone.
Bollinger Bands- the ETF SPY has moved to the bottom of its Band this week in a quick downward motion and it is also pushing through it has fallen so quickly. Obviously we are going to see one of three things happen here. We will continue to slide down the lower band in a strong bearish way; we will possibly move up a bit and then come back down to the band; or the ETF SPY will bounce off and start to move up. Much has to depend on Congress. If we come up with a plan, look for the move up and then possibly a bounce.
RSI- the SPY is strongly bearish here and we have no indication of anything less than that. If we look at our 3 lows, they appear to be getting higher as they spread out, but we are bearish in every way here. I must caution again, technical reading of the markets is important, but watching outside influence is also important. We must watch congress over the weekend.
MACD- the MACD is following the RSI in supporting the bearish movement of the SPY. If we look at the MACD Histogram, the ETF SPY looks like it has not yet finished making a bottom on its downward slope here. Because of this we may expect move movement into bear country.
Chart- we are bearish, and we are pregnant we should be having little cubs at this rate! All I can say at this point is that we have fallen hard and must stabilize ourselves here soon. The bottom should be here soon and look for the markets to rebound after the government stops fighting over the debt and comes up with a solution. Buyers will be everywhere.
Outside Market Influences-
Watch out Monday…USD- U.S. ISM Manufacturing Index, a leading indicator of industrial activity, where a reading above or below 50 is the dividing line between economic expansion and contraction, Mon., Aug. 1, 10:00 am, ET. The U.S. manufacturing sector is forecast to register another month of expansion with an ISM index reading of 55.5 in July from 55.3 in June, but a move back towards 50 would be an indication of a loss of momentum in industrial activity. The Fed’s preferred inflation gauge, the core PCE Index which excludes food and energy costs, is expected to show subdued inflationary pressures with the index increasing by 0.2% m/m in July from 0.3% m/m in June. This comes out Tuesday.
“Along with the Personal Consumption Core Price Index, or PCE, surging to 2.1%, which is above the Fed’s desired 2% level, it seems as if more devaluing of the dollar may not be the answer. Although debate remains on what to do with the “Ceiling,” it is dogmatic to believe that nothing would help more than a growing economy: unemployment rates would recede and the flow of capital to those who need benefits would undoubtedly fall as well.”
Government has put us where we are, so do not think for a minute that government will get us out of this. It all started with the housing markets & lowering standards of lending. “The answer is that government embarked, at the urging of “social justice” activists, on a policy campaign to degrade the prudential standards that prevailed in the housing lending market. The government effectively demanded and enforced irresponsible lending, and they got it. Unfortunately the government can’t repeal the iron laws of economics, so what they got was a flimsy, risk-infected financial system that was bound to crash, which it did.” We need a free market to get us going here.