The Action Is Getting Sloppy…

Good morning and welcome back. The Fed is clearly the focus right now. But since it’s Monday, let’s get right to our weekly review of the state of the market and our major market indicators/models.

As usual, the first stop is a review of the price/trend of the market. Here’s my current take on the state of the technical picture…

Market traded “sloppy” from Tuesday’s open forward

Short-term downtrend appears to be developing

A close below 2157 would indicate a downtrend was picking up steam

A close below 2145 would put bears in charge

The dollar seems to be the driver of the current decline in stocks (dollar strength hurts multinational earnings)

Adjustment of rate expectations (Fischer saying 2 moves in 2016) likely key focus in short-term

Bears may also start yammering on about potential head-and-shoulders top formation

S&P 500 – Daily

From a longer-term perspective (e.g. looking at a weekly chart of the S&P 500)…

Bulls appear to be taking a break – could be the “pause that refreshes” – or start of meaningful downtrend. We shall see…

Downside action above 2130 likely just “noise” at this time

Weekly close below 2130 would be a setback for bulls

Weekly close below 2035 would represent a “lower low” and be a real problem for bull camp

From big-picture standpoint, the key line in the sand on weekly chart is the long-term uptrend line – currently sitting at 1950

S&P 500 – Weekly

Next, let’s look at the “state of the trend” from our indicator panel. These indicators are designed to give us a feel for the overall health of the current short- and intermediate-term trend models.