Commodity Chart Of The Day
(click image to enlarge)
The story all summer has been the relentless run higher in the stock market, and those that tried to pick a top were run over as prices moved one way, appreciating 13% in the last three months. Is a 4/5 year high justified?
I say no, but the saying is "the trend is your friend," and as seen on the chart above, it looks like we finally get a break of the trend line that has supported since June. The S&P has closed below its 9 and 20 day MA, and on a break of that trend line near 1400 in the September contract, my prediction would be a trade to the 38.2% Fibonacci level at a minimum. Use the white Fib levels on this chart as targets on depreciation in the coming weeks.
Those not comfortable taking a speculative trade forecasting a down move are advised to lighten up on their long equity positions and be willing to buy back in at lower levels.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.