Moving on to Q4
Per my assessment, we continue to remain in a transition where there is a tug of war between the bulls and the bears with no one seemingly winning. The short-term trending keeps toggling although the mid-term and long-term remain mostly bearish. At the same time the markets look oversold.
September was a down month - the worst month of the year is what I heard. The details are not that important as it is already in the past. What is the trending we see in the future based on which we can strategize our trading?
Major Markets
The summary of the trending decidedly looks bearish. Here are the details:
The SPY, RSP and DIA have been down 4 weeks in a row now. The IWM and QQQ eked out a winning week last week after 3 down weeks.
We can see the cells are mostly red and amber. The typical pattern one would expect is for the hourly to turn bullish, then the daily and then finally the weekly. However, we can see from the weekly that they never really turned all bearish (red cell). So, if we get a classic rotation, we will see the weekly cells turning red.
Needless to say, we could easily turn back to all bullish without the weekly signals not turning fully bearish. The point I am making is that the different time periods of observing the indicators gives us a better indication of the trends and the probabilities of trend changes.
SPX Sectors
Not too much to glean from the SPX sectors other than some rotations taking place. Energy XLE strength may be waning at least in the short-term. And we may be going back a back to the leaders who brought us here - XLK, XLC and XLY.