I’ve written four bearish articles in the Market Minute this week.
Let’s go ahead and make it five…
The S&P 500 closed yesterday at 2652. That’s right where it started the week. So, the big move to a new all-time high earlier this week has been erased.
Meanwhile, the Volatility Index (VIX) has rallied about 10% since Monday, and it looks to me like it could easily spike higher. The iShares iBoxx High Yield Corporate Bond ETF (HYG), which we watch as a leading indicator of stock prices, closed below its 9-day exponential moving average (EMA) yesterday. Its chart sure looks like it’s ready to break down.
Also, today is option expiration day. So there’s plenty of room for some downside volatility today – if traders decide it’s time to cash in some chips.
Adding to all of this, the 15-minute chart of the S&P 500 that I shared with you on Tuesday has indeed broken down from its rising wedge pattern. Here’s an updated look at that chart…
The chart now has support at about 2647 – which is only five points below yesterday’s close. Bullish traders should be hoping that level holds up this morning. If it doesn’t, then the S&P 500 could make a quick trip down to the next support level near 2635. That would pretty much wipe out all of the gains for the stock market so far this month.
Like I said… today could be interesting.
Best regards and good trading,
Jeff Clark
Reader Mailbag
Today, metals and cryptocurrencies remain at the front of readers’ minds…
Gold is real value. It’s not digital or virtual or hidden. Bitcoin is all three, and you can’t exchange bitcoin for anything other than more bitcoin or ether. Can’t cash out. And it gets hacked. Majority of bitcoin volume is in Asia!
Unregulated. Unaccounted for. No real physical anything behind it. Nothing but a digit. Look out!
– Patrick V.
It’s my understanding that there is a REAL gold supply, and a FLOATING gold supply. Apparently UBS sell the same bar of gold ten times over to different buyers. What happens if there is a stock and economic meltdown? When gold buyers start demanding their gold delivered… is there going to be a problem?
So you know, I’m 61 years old having done tremendous research into digital currencies such as bitcoin, Ethereum, Litecoin, Z-cash, etc. Blockchain technology does give these assets intrinsic value. I do believe these cryptos are ASSETS. Young and volatile; yes, but still a reasonable store of wealth when things get rough for the bulls. At least for the proven cryptos. Forget the scam artist. There are many true experts that know the difference.
In likelihood they’ll offer greater wealth building than gold Why not encourage your readers the benefits of storing their cash values from stocks into both gold and bitcoin?
– Mike F.
Why isn’t the price of copper headed higher? After all, Trump talks about large infrastructure projects and the Chinese are already doing them.
– Peter S.
I recognize that I may be one of the less sophisticated traders among your subscriber base, but I do see something in the gold and Philadelphia Gold and Silver Index (XAU) charts that has given me a ray of hope for the yellow metal and its mining share prices.
While gold prices made a new swing low just yesterday, the XAU index has been rallying for the past four days. Perhaps this kind of divergence will be an initial indication of gold prices finding their seasonal low and finally turning their sights higher.
– Melvin R.
As always, feel free to send in your trading stories, questions, and suggestions right here.