Charting the Markets: The S&P Is Heading Down a Dark Road
Stocks had a miserable week after starting off strong, leading to likely more downside to come.
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We continue to find the S&P 500 fighting the 14-week McGinley Dynamic (shown in top pane of the chart below) as stagflation continues to be whistled loudly. The energy generated by the recent downtrend is heavy and reminds us that markets DO go down and momentum can carry markets further than anyone expects.
Not much changed in the indicators yet we see the candles changing back to amber, which is neutral on the GoNoGo composite of indicators. Volume trends are bearish, even though it has not been excessive.
Some have said this selloff has been "orderly," but frankly I really don't know what that means exactly unless you're trying to feel better about losing your capital by applying a label. Selling is selling, and we have said for weeks this is bear market action, and you should be ready for those conditions to persist for weeks if not months.
At some point the stock market will bottom and wash out, providing a good opportunity to buy, but that time is not now.
