STOCK INDEXES FALL BELOW 100-DAY AVERAGES -- FOUR SECTORS ARE TESTING THEIR 200-DAY LINES
WATCHING 100-DAY AVERAGES...Stocks remain in a short- to intermediate term downturn that started during September. And moving average lines are being broken. It started with stock indexes falling below their 50-day moving averages. And then falling below their 100-day lines. Chart 1 shows the Dow Industrials trading below its 100-day line but above its 200-day line. It's the weakest of the three major stock indexes shown below. Chart 2 shows the S&P 500 falling below its 100-day average last week and trying to regain it today. Chart 3 shows the Nasdaq Composite recovering today but still below its 100-day line. Decisive closes above their green lines would be an encouraging sign.
FOUR MARKET SECTORS TEST THEIR RED LINES...Four market sectors have dropped all the way to their 200-day averages and are in the process of testing that potential long-term support line. Chart 4 shows the Utilities Sector SPDR (XLU) trying to find support at its red line. Charts 5 and 6 show the Consumer Staples SPDR (XLP) and Industrials Sector SPDR (XLI) doing the same. Chart 7 shows the Materials Sector SPDR (XLB) trying to regain its 200-day line after falling below it earlier today. The XLB is also trying to hold chart support along its July intra-day low. Of the three moving averages shown on today's charts, the red 200-day lines are the most important. That's because prices have to remain above their red lines to keep their long-term uptrends intact.
