Economic news caught up with stocks this week. It was quite a volatile day and week, stocks are now short term oversold, so I am expecting some consolidation at these levels. The S&P 500 is trading below both the 50 and 100 day moving averages and just above a prior support low (per chart below), volume is above average, but not extreme. Holding that prior level of support is technically important. If a break of that low, then I would expect a move lower to the 200 day moving average, which is another -4.7% down from today's close.
Bottom Line: The major concerns are slowing growth, euro zone debt issues and emerging market inflation. The markets are oversold and due for a bounce or at the very least some consolidation at present levels. A break of prior support, then I would get even more conservative by placing tighter stops to manage risk. Thanks for stopping by.
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