There Is Something Very Different Today vs 45 Years Ago
There Is Something Very Different Today vs 45 Years Ago – King World News
With almost everything heading higher today, outside of the dollar which is breaking to new short-term lows, there is something very different today vs 45 years ago.
By Andrew Adams, at Raymond James
May 19 (King World News) – The stock market certainly “fell on black days” and dropped “like a stone” Wednesday, so much so that around the middle of the day I had to double-check to make sure my charts had refreshed properly given the way some people were fretting about the decline. Yes, it was a bad session, but it may have felt even worse than it was just because of the weeks of inactivity that preceded it and the complete lack of any real downside since last fall…
I often joke that investors have forgotten that the markets sometimes go down, but perhaps there is some truth to that. The weakness was not altogether surprising, though, given the S&P 500’s inability to make a definitive breakout above 2400 and the winding down of earnings season providing little positive news to balance out the political turmoil. Even in Wednesday morning’s Charts of the Week I wrote that “The two gaps from April 24 and 25 continue to bother me… as it just seems like the S&P 500 wants to close those, which would bring it down to at least 2355- 2360.” Of course, I thought it would probably take more than ONE SESSION to fill those gaps, but oddly enough the S&P 500 ended its “black day” at 2357, right in that support range.
That took us into yesterday’s session, where the pre-opening futures hinted at a possible follow-through day on the downside. It quickly failed to materialize, however, as the area right above 2350 proved to be the first line of defense against further losses and boosted the index up into positive territory for the majority of the day. The S&P 500 even managed to recapture its 50-day moving average for a little while before closing the session just below it. Now, the question becomes have we already experienced the extent of the decline and is it safe to get back into the water again (if you even got out of the water to begin with)?