Weekly Market Perspectives – 08/17-08/21

 

Weekly Market Commentary –
 

Finally the decisive break we’ve been waiting for.

This week we saw the SPY finally break out of its symmetrical triangle and hit the the downside target we had laid out over the past couple of weeks.

Note how the 50 period weekly SMA had previously held two excursions to the area however remember the rule of 3’s –  the 3rd time’s the charm.

This week’s selling was also accompanied with heavy volume so the intermediate bias is now to the downside with numerous potential downside targets –

  • Gap fill @ 196.16
  • Fib target @ 192.02
  • Gap fill @ 190.30
  • Gap fill @ 186.27
  • Fib target @ 178.53
  • Gap fill @ 177.48
  • Gap fill @ 173.22

The VIX is now in the high 20’s and is the highest it’s been since 2011.
Also note the current uptrend on the ES was violated this week.  It’s a monthly chart so a close below the trendline next week would signify a break.
All in all the market has room for further weakness here so stay safe.
Here’s an updated VIX (the Volatility index) chart below.

Here’s an update on our sector rotation watch.

Notables –

  • All sectors closed down for the week
  • Major technical damage was done to many of the formerly bullish charts and will require time to fix some of those broken charts

The major sectors are posted here on Finviz for your viewing pleasure –

http://finviz.com/screener.ashx?v=211&ft=4&t=XLF,XLY,XLK,XLB,XLI,XLE,XLU,XLV,XLP

Weekly Market Perspectives – 08/17-08/21

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