๐ The Bottom is About to Drop in Stocks
The market is breaking down and bears seem to be in control.
The market has come well off itโs lows, and itโs been a hell of a ride for Bulls since last October.
But the market seems to fundamentally be breaking down here in favor of bears. Here are 5 technical reasons why:
The first signs came July 27th, when we had a major bearish engulfing - a very high predictor of lower prices.
Then we fell below the 50-day moving average which usually acts as support.
We rallied since last Friday, but today we failed at the 50-day moving average.
Price also created another bearish engulfing. A sign of more to come, especially as it happens at the 50-day MA (thatโs called confluence; when the โstars alignโ for a trade)
All happening on lower / declining money flows.
Here is a chart as of today of the S&P 500:
These are all very strong indicators that the market is breaking down in favor of bears.
Not to mention, in this entire bull run, the Dow hasnโt really participated. For a market run to be durable, all equities must participate.
Bears look like theyโre back in control, as this is a fundamental breakdown of the technicalsโฆ buckle up โ the bottom is about to drop.