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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* In answer to this often-asked question, please be advised that I do not post articles from other writers on my site.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

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Monday, March 09, 2020

SPX Retreats From The Outer Limits

As of Monday's close (2746.56) (it's a full moon today), the S&P 500 Index (SPX) is -18.89% from its peak at 3393.52 on February 19 -- just 1.11% from reaching 'bear market' status -- amid a sea of red following a meltdown in global markets.


WORLD MARKET INDICES (Source: indexq.org)

Prior to its massive 13-day purge, it touched the outer limits (+5 standard deviation) of its long-term uptrending regression channel, as shown on the following 20-year monthly chart.

SPX major support lies another 150 points, or so, below Monday's close, around 2600 (blue line). That level is a convergence of:

  • its 50-month moving average (red)
  • the -1 standard deviation level of this channel
  • the upper edge of the value area (blue line) of a 10-year weekly TPO Profile, as shown on the weekly chart of the S&P 500 E-mini Futures Index (ES), below
  • the lower edge of the value area (blue line) of a 2-year daily TPO Profile, as shown on the daily chart of the S&P 500 E-mini Futures Index (ES), below (as more fully discussed in this recent post)

SPX 20-Yr. Monthly

ES 10-Yr. Weekly

ES 2-Yr. Daily

BOTTOM LINE:

We may see the SPX slide further down to around 2600, or lower, before it begins to stabilize, inasmuch as accelerating downside momentum (rate of change shown with an input value of one period in histogram format) has not yet reached a new 20-year extreme capitulation level, as shown on the following 20-year monthly chart of the SPX.

Keep an eye on the above-referenced levels, together with my recent posts here and here, which describe other gauges that I'm monitoring in the near term for possible clues as to SPX directional moves.


SPX 20-Yr. Monthly

REMINDER:


FINALLY:

In his Monday evening opening monologue regarding the Chinese coronavirus epidemic, Fox News TV host Tucker Carlson highlighted this rather startling warning that was posted in the official paper of the Chinese Communist Party last week:

"If China retaliates against the United States at this time, in addition to announcing a travel ban on the United States, it will also announce strategic control over medical products, and ban exports to the United States...If China announces that its drugs are for domestic use and bans exports, the United States will fall into the hell of a new coronavirus epidemic."


You can view Tucker's 7-minute monologue in the video below...the aforementioned quote is taken from around the 6-minute mark.

Given that China manufactures most of the antibiotic drugs and many others for U.S. consumption, this is a dire warning, indeed, and is all the more reason for the U.S. to plan for and implement such manufacturing capabilities themselves, sooner rather than later.

I don't think President Trump will be announcing a Phase II trade deal with China anytime soon, with that kind of pejorative, pugnacious, disdainful and downright threatening attitude toward the U.S.



Furthermore, Tucker's interview, that followed, with Dr. Marc Siegel highlights important and developing aspects of the virus, as discussed in the following video.