S&P 500 Trend Price Flies Warning Signals, but this expert says “Start looking for a purchase signal” after last week’s draw
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The S&P 500 index jumped over 2%on Friday, after falling into a correction zone on Thursday last week, while Nasdaq is still on the correction territory. Although technical analysis indicates bear trends, this analyst says that investors can start looking for a purchase signals.
What happened: From Friday, the S&P 500 index was 8.27% with a maximum of 52 weeks, followed by a followed by 10.18% on Thursday. Similarly, Nasdaq 100 was 11.33% lower than a 52-week maximum of Friday.
According to Benzing pro and Ranking of the edgeTechnical analysis of the fund that trades it on the S&P 500 Index Stock Exchange, SPDR S & P 500 ETF TRUST (Nyse:SPY) Flash of warning signals.
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Nevertheless Jay KaeppelAn elderly analyst in the sentimentrader through its model of panic/euphoria analysis model showed that the fall of the S&P 500 still does not flash the purchase signal. However, from this point, investors could “start looking for a purchase signal”.
According to the chart he divided, when the panic/euphoria line drops below the excessive level of pessimism, investors could expect a return to an average of over 7% of refunds after two months and 28% of refunds after a year. But this follows a series of red dots representing that investors should take the back seat.
So, as his model shows the presence of only one red point, Kaeppel does not yet forecast a purchase, but the beginning of a potentially new purchase signal.
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Why is that important: On Thursday, Spy fell below his 200-day moving average after the longest series and his technical charts showed that he was below all short and long-term moving average. The Indicator of the MacD momentum was a negative 11.38, signaling a short -term trend, and its relative 37.72 strength index was in a neutral zone.
