Last week we wrote to expect the markets to follow the right side of a triangle downwards. We said it was kind of obvious that the markets would test the November lows where the bottom of the triangle and an inverted “T” crossed paths. To start the week, we were dead wrong. By the end of the week, the markets resumed the selling pressure and finished the week pretty much where they were Monday morning.
We don’t expect the market to be as kind this week. Our Momentum Indicators continued to lose steam and our Market Leadership Model is an eyelash away from being in sell territory. The charts are, like we mentioned above, right where we stood last Monday; pointing the way down.
We still expect to see the indexes test their November lows sometime in the next week or two. A test and a bounce would actually be a good thing. A test and a failure, look out.
Filed Under: Stock Market Trends