Friday Morning pre market open August 21, 2015
Now that all the indexes have turned down, the acceleration is under way. Think of a roller coaster finally going over the top, the plunge begins.
Markets exhibits fractals or larger and smaller moves. Let's look a the daily versus weekly charts to see what I mean.
Daily Dow
Here is the classic sign of a rounded top, fading RSI at top and same thing for MACD at bottom. The MAs converged as the chart price took a new direction, a common occurrence when the trend changes.
At the daily level of trend the markets have turned DOWN. Notice the market closed on the low for the day.
Weekly Dow
But the point is that the weekly chart of the Dow is still in an uptrend. This explains the money managers that are still long the market from an entry level years ago. Certainly the October lows at 16,000 now become a realistic near term target.
If we parallel the 2000-2002 decline this will be a difficult affair with many up and down swings before the final low is registered.
On the other hand just scanning the WSJ yesterday I was struck by the massive negative mood world wide, and indeed world stock markets are also dealing with Russia and Brazil leading the plunge down.
Exxon Mobil
I will post the weekly newspaper column Sunday. In it we note that while Energy Service XES has had a big fall already, the XLE energy producers are still hold outs. The last two days action however is beginning to change that picture. Now even XOM formerly the largest company in the world, is being hit hard.
XOM Weekly
This looks like XOM is setting up for a severe plunge. When the low finally hits it will be a great buy.
Note the crossover of the 50 week MA, the first crossover in several years.
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