{"id":16294,"date":"2020-06-26T07:30:27","date_gmt":"2020-06-26T11:30:27","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=16294"},"modified":"2020-06-26T07:30:27","modified_gmt":"2020-06-26T11:30:27","slug":"the-calm-before-the-storm","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-calm-before-the-storm\/","title":{"rendered":"The Calm Before the Storm"},"content":{"rendered":"

The stock market was quiet yesterday. Well… relatively quiet, anyway.<\/p>\n

The S&P 500 gained 34 points, just about 1% on the day.<\/p>\n

Bulls were happy to take the victory, especially after Wednesdays 2.2% bashing to the downside. The mere fact that the broad stock market didn’t get smacked down again yesterday has some traders thinking the one-day-decline was all we’ll get.<\/p>\n

They’ll argue the traditional end-of-June selloff is over, and it’s time for another rally. After all, stocks only go up, right?<\/p>\n

I’m not so sure.<\/p>\n

Granted, I’ve been not so sure for a while now. So, take that with a grain of salt.<\/p>\n

But, remember Wednesday’s essay<\/a> where we looked at the consolidating action in high-yield bonds? We suggested traders should pay attention to which direction the junk bond market breaks, because the stock market would likely follow.<\/p>\n

Well, here’s an updated look at that chart…<\/p>\n

\"Chart\"<\/div>\n

It sure looks to me like the junk bond market is starting to break down. If so, the financial markets are shifting from “risk-on” to “risk-off.” Wednesday’s 2.2% decline in the S&P 500 was just the beginning of a larger decline. And, yesterday’s relatively quiet day was just the calm before the next storm.<\/p>\n

Last week<\/a>, we noted how the chart of the S&P 500 appeared to have broken down from a parabolic move. We suggested that following a bounce back up to its 9-day exponential moving average<\/a> (EMA \u2013 red line), the index would be ready to decline again.<\/p>\n

Wednesday’s action was likely the start of that decline. Take a look…<\/p>\n

\"Chart\"<\/div>\n

The S&P has immediate support<\/a> at its 50-day moving average<\/a> (MA \u2013 blue line) near 2975. That’s the minimum target for any downside move from here.<\/p>\n

But, if we have indeed shifted to a “risk-off” mode, then it’s possible the market will give up all of the gains from its parabolic move and head back down towards 2800.<\/p>\n

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

\"\"<\/p>\n

Jeff Clark<\/p>\n

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

Do you think we’re due for another rally? Or is a sell-off imminent? Write us your thoughts at feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The stock market was quiet yesterday…<\/p>\n","protected":false},"author":43,"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-16294","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\/16294","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\/43"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=16294"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/16294\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=16294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=16294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=16294"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=16294"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=16294"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=16294"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=16294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}