Monday, March 24, 2014

What Will Stocks Do From Here?

As suggested in this weekend's video update, stocks have started off weak this week.  Without going into details in this post, I suspect prices will pullback a bit further, and possibly more extensively than we have seen in the last 1.5 years.  As we get into April and May we enter the traditional seasonal high in stocks, and the technical analysis at this juncture supports the prospect of a typical annual sell off this spring.

For me the line in the sand is relatively clear in that I remain bearish until further notice, as long as SPY continues to close below last week's high.  I won't speculate too much here on how far prices may decline (if they do) other than to state again that a typical stock market correction throughout history has averaged about 10-11% and lasted about 6 weeks from high to low.  And also I will reinforce the weekly time frame bearish divergence present in the MACD which would suggest that any pullback here may be of a larger magnitude than most of the minor corrections since Nov 2012.

Drop a comment if any specific info is desired.

All the best in your trading.


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