The Sp500 continued stair-stepping down from one support level to the next
and reached our chart target of 1346 by the end of the week. Market breadth
bottomed-out on November 13th and showed a positive divergence on the 14th.
As expected, that helped stem the decline but it didn't achieve much more
than that. In fact, the index finished the week 15 points lower than it closed
on Wednesday:
The fact that the index closed lower despite improving market breadth shows
how weak and vulnerable this market is. At the current rate, market breadths
should peak in three days after which the sideways/down phase should continue.
The critical support level to watch on the downside is 1346. A drop below
will open the door for a retest of 1330 and 1313. The first resistance level
comes in at 1362 which coincides with our daily pivot point:
We'll conclude with a monthly chart update as a reminder that the SPX has
entered a period when extreme caution is advised:
George Krum is the author of the "CIT Dates" blog and several
books available on Amazon.
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