Stock Bottom In Today?
Thursday, October 11, 2018
As I write this at 12:32pm today, market action, to me, is looking like a bottom.
Obviously we will never know for sure.
Let’s look at the S&P 500 index daily chart for the past 1 year.
Focus on the blue line – that’s the long-term trend line – notice how over the past 1 year, the market has run up – and then made a correction down – right to that rising 200-day SMA (simple moving average) trend line. Notice the green circle I have made on the chart – the 200-day SMA is acting like a trampoline as it bounces off that trendline.
Today, markets have made a spinning top candlestick pattern (see the blue circle below) – that usually is a sign of a trend reversal – the short-term trend is down, and we have these two indicators showing that we may (not guaranteed) be at a bottom:
Bouncing off the long-term trendline
Spinning top candlestick pattern
That’s the technical analysis – let’s talk about the economy:
Consumer prices rose less than expected in a news release this morning – that’s good news. CPI rose +0.1% in September and +2.3% trailing 12 months. Two months ago the trailing 12 months hit a six-year high of 2.9%
The 10-year treasury bond rate dropped -1.74% today to 3.169% -- recent increases in interest rates have spooked the stock market
What to do?
The long-term trend remains intact,
That means we will suggest investors stay the course, or add more moneys to stocks, since they have made a correction
If you have concerns, call your wealth advisor. 1.800-578-3181