Why the market is selling off ?
This is the other side of the coin.
There was a time when the uptrend seemed almost unbeatable. For three weeks day after day making news highs the market climbed a steep slope, throwing everyone in amazement and wonder. How can this market keep on doing that? And finally on May 22nd, SPX made a wide ranging day, and now we are 75 handles down the tube. The market is exactly where the last job report came in May, and now awaiting a new job report this Friday.
This has been quite a ride so far. The ups and the downs.
The selling continued in the indexes all day from the start. Without making a newer high the market kept on selling off and SPX was down 22 point to 1607. It has not touched the 50 day line yet. Will it bounce here ? Perhaps depending on the unemployment report again this Friday.
This is a bullish channel and it is a flag formation rather than a breakdown of some sorts. It is tough spot to be short here, and yet you cannot buy in this area either. We have not seen the end of the selling yet, and after the SPX makes some kind of bottom we will know for sure.
For the moment the direction of the market remains to the downside. Many people are asking why the market is selling off ? It called profit taking, and simply a correction which is quit a healthy thing without which you would not have entered the markets at all.
Major stocks are in downward trend also. GOOG is also sliding in downward channel and some stocks are already near their 50 day moving averages. HD is close to hit that anytime. XHB is also below it and some builder stocks are down to 200 day lines