The four major market averages (Dow, S+P, Russell and Nasdaq) are still below their 200 day moving averages. Earnings estimates are projecting a decline of 5% for the 3rd quarter 2015 and earnings and revenue growth aren’t expected to return until the 1st quarter of 2016. It’s possible, for this year, investors will not experience the typical “V shaped” recoveries that they have been used to during this 5+ year bull market rally.
The Nasdaq composite has run into short term resistance between its 200 day moving average and prior swing lows.
The S+P 500 stands about 2% below its 200 day moving average but it has also ran up against some potential resistance here at 2040. Support stands at 2020 below.
Seasonality suggests we rally into the year end. Technical resistance stands in the way. Looking ahead it’s likely the market moves higher from here. However it may take some time to repair the technical damage left behind during August’s sell off. Especially if earnings continue to be subpar.
Want to learn how to trade and analyze the markets? Whether you’re a day/swing trader or investor wanting to learn how to analyze trends in the financial markets, there is something in The Trading Playbook for everyone.