Charting the S&P 500: Seeing 'Purple' in a Dangerous Market
That support line we worried about was finally penetrated this past week.
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With ease, the stock market fell sharply last week and wouldn't you know it, that purple trendline was tagged for the first time since 2023. In fact, the price fell just below the trendline on the close for the week, and the purple candle on this weekly chart puts the S&P 500 firmly into the bearish camp. Looking back, the last time we had a weekly purple candle was a bad week in early 2023 and then for most of 2022 that was the condition.
So, the question is: Will the bulls resurface this week or will the beatings continue until morale improves?
Certainly we can see the markets are pretty well oversold at this point and due for some relief, but the news just is not helpful and many who were lined up waiting for a pop higher have been sorely disappointed and lost too much ground.
This market is dangerous right now, with high volatility, heavy selling turnover, a bearish MACD (moving average convergence/divergence) and price action confirmed in the bearish camp. There is no other way to spin it.
The next target area is the 200-week moving average (light blue), around 4600.
