Courtesy of John Nyaradi
After today’s sell off, major global stock markets hang by a thread with an economic data storm just ahead.
Stocks, exchange traded funds, bonds and the U.S. dollar reacted strongly to European debt problems today and suffered a major sell off that took major indexes down to significant support levels, where they now hang by a thread.
chart courtesy of www.stockcharts.com
In the chart of the S&P 500 above you can see how the index has dropped below both the 20 and 50 Day Moving Averages, widely followed technical indicators, and is now deep into strong support levels in the 1300-1310 range. Hanging by a thread.
chart courtesy of www.stockcharts.com
The Point and Figure chart points an even more graphic picture, with prices now resting at a critical juncture.
A further drop would trigger a double bottom breakdown and a “sell” signal for the S&P 500. Hanging by a thread.
And tomorrow starts the data storm that could well “tell the tale” for the market going forward into this notorious “sell in May and go away” period.
Economic reports to watch this week:
Tuesday: April New Home Sales
Wednesday: April Durable Goods
Thursday: 1st Quarter GDP; Second Estimate, Initial and Continuing Unemployment Claims
Friday: April Personal Income, April Personal Spending, Final May Michigan Sentiment Indicator
Pay special attention to GDP. It’s going to be an exciting week.
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