Rally for One – Week or One – Month?

The 03/11/23 blog “Stock Market Fuel” noted that the Dow Jones Industrial Average (DJI) had two Fibonacci support points.  One at 31,552 the other at 31,657.  The DJI bottom on 03/13/23 was at 31,641 between the two support points.
The 03/11/23 blog also illustrated S&P 500 (SPX) Point & Figure support at SPX 3,815.  The SPX bottom on 03/13/23 was 3,808. Subsequently U.S. stocks have rallied, however within less than one – week there have been three very important events.

  1. On 03/10/23 the SPX significantly broke below its 200 – day moving average and two Fibonacci support points.  This break of strong support implies the start of a larger decline may have begun.
  2. There have been two U.S bank failures.
  3. Evidence indicates that the UK – 100 may have made a major top and could be in the early stages of at least a multi month decline. 

These factors have increased the probabilities that U.S stocks may also be in the early phase of at least a multi – month drop.

The daily SPX chart courtesy of BigCharts.com updates the action.

Slow Stochastic has a bullish lines crossover and MACD – Histogram has a bullish divergence.  These signals usually imply the SPX could rally for at least one – week.  The FOMC will have an interest rate announcement on 03/22/23.

The reaction of U.S stocks to this announcement could initiate a strong multi – week rally or a multi week decline. 

Blogs later this week will illustrate  SPX – Elliott wave counts on the possibility that a major drop  may have begun.


Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: