The markets continue to show weakness over the last two weeks. Both the long-term and short-term trends are trading in ranges, but are showing a bearish tendency.
Long-Term
Long-Term Trend
The MACD on the weekly SPY continues a steady decline. Though the histogram remains above the zero line, we are seeing early signs of a bearish market. The weekly price of the SPY remains within a range that was established in the second week of May. The SPY will break out of the range if it falls below 89. Also, note that the SPY has found support at the 20-period EMA. The EMA is currently around 89.40. On the other hand, a breakout above 95, would re-establish the recent bullish trend.
Short-Term
Short-Term Trend
Like the long-term trend, the short-term trend is range-bound. The SPY has been consolidating since mid-June into a triangle pattern. It found its support around 89.91. However, on Thursday it closed below both its 20-Day and 50-Day moving averages which is bearish.
Action
Look for a breakout in either direction on both the short-term and long-term charts to confirm a market direction. The tendency appears to be favoring a bearish breakout, but do not anticipate the market.
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I am an amateur trader and investor with over 15 years experience in the stock market. I was bred to be a fundamentalist and followed fundamental analysis until 2009. Following the 2007-2008 bear market, I began to shift from a buy-and-hold strategy to trend-following techniques.