I talked last week about bearish flag patterns in a post (Wave the Bear Flat: 10 Stocks in Bearish Flags) and how powerful a predictor they are and because most major averages formed a flag last week including the SPY they are now breaking out of the flag formation and breaking through major support levels.
The chart below would suggest this move below $130 is not over the price action today was nothing but selling as we closed at our lows of the day and that is going to set up a volatile Monday.
Based on the break in support today at $130 next week we should see more selling. The news overall is going to be light next week and Europe will mostly dominate the headlines and that will move the market. If there is support at the 200 day moving average it will be short lived as we still need to resolve the Spain bank mess and Greece elections which for the most part is a coin flip.
Trades that I will be looking for this week will be stocks that have been resisting the fall but finally broke out of their flag patterns or breaking steeply through support today. Find stocks from a weak sector. Energy, Financials, Material right now are not performing
My SPY forecasts have been right on for the last couple of weeks if this has helped your trading let me know at cmttrader@live.com or visit CMTTrader for our FREE Trial Newsletter.
Disclaimer: This article is intended to be informative and does not constitute a buy, hold, or sell recommendation., and should not be construed as personalized advice as it does not take into account your specific situation or objectives
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