A weak week for stocks…

The financial markets suffered sharp declines this week capped by a disappointing Jobs Report. The Dow Jones Industrial Average (chart) fell 1.44%, the Nasdaq (chart) -3.68%, the S&P 500 (chart) -2.44% and the Russell 2000 (chart) -4.07%. Both the S&P 500 and Nasdaq experienced their worst weekly performance this year.

So what now? As I review the technicals of how these key indices are setting up, three of the four are trading below their 20 and 50 day moving averages with the sole exception being the Dow. Certain market technicians look at these key moving averages as support and resistance markers with the most closely watched 200-day as the main barometer. Now one day or for that matter a few days trading below this popular technical indicator doesn’t necessarily make a trend, however, if these indexes remain below their shorter term moving averages for an extended period of time, I will be looking for the 200-day to be tested at some point and time. If that were to occur, we could be looking at a near term healthy correction for equities. Good luck to all.

Have a great week 🙂