The Fed spoke last week and saved the day. The Fed talked about tapering “soon”, but not now, so the market breathed a sigh of relief! Last Monday the three major indices fulfilled a peak to trough 5% correction. Then the market quickly reversed the correction. The S&P 500 and NASDAQ traded above their perspective 50-day moving average
The S&P 500 closed just 6 points below its 50-day moving average last Friday. Closing one day below its 50-day moving average is not enough to say the market is set to decline from here. It needs to close two consecutive trading days below its 50-day moving average to confirm the pending decline.
In our last cycle analysis we pointed out that the market could hold up until the September FMOC meeting. But on Wednesday September 8th the market cracked. We sent out a private email to our subscribers stating that the cycle oscillators have confirmed a daily cycle top. The following day’s intraday trading further confirmed the daily cycle was on its way down.
The latest job data released on last Friday was soft, not so great, but also not so gloomy which is good for the market because it could push the Fed’s tapering further down the road, at least that is what the market was thinking at the moment. Yes, the soft data is indicating the economy is slowing down due to a number of reasons
