Wednesday, May 6, 2015

Danger Will Robinson!

The Market Trend Model (http://bitly.com/M_Trend_Model) now shows a negative bias across the board as the herky-jerky price action of breakout/failed breakout to breakdown/failed breakdown has resolved to the down side.  On Wednesday the major market indexes failed to hold their respective 10-week moving averages and have followed last week's action of the Russell 2000 to the downside.

The Nasdaq (http://scharts.co/1HAtavT) looks to be headed lower as this index sliced through its lower trend line of support with authority today.  At the moment the Nasdaq appears to be on its way to the lower end of its three month range where the 4,800 price level has been support. The S&P 500 (http://scharts.co/1DwrIaY) continues to show weakness as well and this index appears to be headed toward the 2,000 level.

Several upcoming economic reports including the employment situation, retail sales, business inventories, and the producer price index will undoubtedly swing market prices back and forth.  The $1 question for both bull and bears is, does "buy the dip" continue to work or has the stock market reached an inflection point where the incremental buyer has left the building?

Despite intraday moments of strength, the major stock market indexes are now in a confirmed downtrend...but always remain mindful that anything can happen.