Last week we saw a powerful reversal on Wednesday, also last week the Japanese market sold off extremely sharp. Today we got a holiday in the US. Where will this market go this week? I see some more downside in these overbought markets! Everyone is so bullish out there and markets can't come down! Yeah right once the panic selling will kick in, we can see another flash crash!
Normally we will see a holiday hangover type day where the markets will go sideways. The Nikkei was down again -3%. Will this puts some pressure on the US markets?
The daily SPY is still at support, it's just trading above the 20 moving average. But once we can close below this small support area, we can see a quick flush to the 50 daily moving average. This will be the first significant support on the markets!
Keep your eyes on the financial mastodons like JP Morgan ($JPM)! Wednesday we got a topping tail on the daily $JPM chart. This tells us that we can see some more selling in the financials this week. First support level on JP Morgan will be the $51.00 area.
Kristof De Block