Stock Markets continue to be choppy

The last 6 trading days of the S&P 500 have been even at 3 up days and 3 down days. The price has moved up in these 6 days, but the sentiment seems to have turned negative over the last 2 days.

Here is the 3-month chart for the S&P 500.

Strangely, the low of this period was reached on a hugely up day. This is the low of this bear move so far. The current price is right in between the support and resistance lines, and it is anyone’s guess which one it is going to test first. If I had to pick, I would pick the support line below which is at 3610. That level is about 1.5% away and I will not be shocked if we test that tomorrow.

Below that support line of 3610 there is really no support until 3491 which is currently 4.7% away. So, it is not too much of a stretch. Unlikely will happen tomorrow but quite conceivable early next week.

I am not trying to be ultra-negative, but the charts do show a bleak picture. The short-term trending and the long-term trending continue to remain bearish per my model. The price is above the 10-day moving average but below the 20-day moving average.

My plays continue to remain to the downside.