Monday, October 5, 2015

SPX S&P 500 Daily Chart 150-Day MA Slope is Negative Signaling Cyclical Bear Market

Remember during the spring and summer Keystone would point out the flattening of the 150-day MA but the bulls kept moving the important moving average higher. The slope of the 150-day MA is key in determining if a stock or index is in a cyclical bear or cyclical bull market pattern. In the green square, the 150-day MA is sloping upwards so the stock market was in a cyclical bull market pattern and the wine was flowing like water. Not anymore. The 150-day MA slope is negative now signaling a cyclical bear market. Stocks would be expected to be lower in price in the weeks and months ahead unless the 150-day MA curls upwards and starts sloping higher again.

The S&P 500 (SPX, Dow Industrials (INDU), Nasdaq Composite (COMPQ) and Russell 2000 small caps (RUT) all display 150-day MA's sloping downwards all in cyclical bear markets. The Nasdaq just rolled over so watch that one closely since if the broad indexes are turning around to mount a sustainable rally, the 150-day MA on the COMPQ may flatten and start to curl higher which would tell you the market bulls have beans. As long as the 150-day MA's slope downward for the four major indexes, stock prices will be lower for the weeks and months ahead.

Use the same technique on all your trades. If you are long a stock and the 150-day MA slope is negative, your trade is in bad shape. If the 150-day MA is sloping higher for your long trade, you are happy. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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