{"id":15454,"date":"2019-12-02T07:30:14","date_gmt":"2019-12-02T12:30:14","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=15454"},"modified":"2019-12-02T07:30:14","modified_gmt":"2019-12-02T12:30:14","slug":"why-i-see-more-weakness-ahead","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/why-i-see-more-weakness-ahead\/","title":{"rendered":"Why I See More Weakness Ahead"},"content":{"rendered":"

We came into last week expecting stocks to trend higher. After all, the last several trading days of November are typically quite bullish. Over the past 40 years, the S&P has rallied 28 times during the last week of November. And, the average gain is 1%.<\/p>\n

So, it’s no surprise the market was higher last week. Even after Friday’s modest pullback, the S&P 500 managed to gain almost 1% for the week.<\/p>\n

But, as I mentioned last Monday<\/a>, I wasn’t looking to buy stocks last week. The chart of the S&P 500 looked vulnerable. And, the Volatility Index (VIX)<\/a> was on the verge of generating a sell signal.<\/p>\n

We got that sell signal at the close of business on Wednesday when the VIX closed back inside its Bollinger Bands<\/a>. The VIX continued higher on Friday, thereby confirming the sell signal. So, the market should be headed for a period of weakness.<\/p>\n

Take a look at this chart of the S&P 500 plotted along with its various moving average lines…<\/p>\n

\"\"<\/p>\n

All of the moving averages are spread fairly far apart – with the short-term 9- and 20-day exponential moving averages<\/a> (the red and green lines) trending far above the 50-day moving average<\/a> (the blue line). The market has used up a lot of energy during its recent rally phase. It now needs to either consolidate for a while and allow the 50-day MA to catch up to the 9 and 20-day EMAs… or fall, and force the red and green lines to decline down towards the blue line.<\/p>\n

Either way, there’s not much energy available right now to fuel a strong advance from here.<\/p>\n

The market has had a tremendous year for far, with the S&P 500 gaining about 25%. Lots of folks are looking for even more gains as we head into Christmas and into what is typically a strong bullish seasonal period.<\/p>\n

Before that happens, though, it looks to me like we’ll get a few days of weakness. A pullback from here would be in line with often happens following a VIX sell signal. And, it would give all the moving averages a chance to come together again and build energy for another rally going into the end of the year.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

P.S. <\/strong>Today’s the last day where you can claim a subscription to my introductory options trading service, Jeff Clark Trader<\/em>, for just 99 cents<\/a>.<\/p>\n

We’ve never offered the service at that price before… and I’m not sure if we ever will again.<\/p>\n

If you’re looking to get started trading options, with a conservative strategy that just uses three stocks over and over again, learn more right here<\/a>.<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

Are you preparing your portfolio for a drawdown this week? Or holding out for a year-end rally?<\/p>\n

Send in your responses – along with any other questions or comments – to feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s why we should see some weakness…<\/p>\n","protected":false},"author":34,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-15454","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/15454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=15454"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/15454\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=15454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=15454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=15454"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=15454"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=15454"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=15454"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=15454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}