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Markets nearing crossroads

Two weeks ago, popular market indexes rallied to their respective 200-day moving averages and stalled. The 200-day moving averages are sloping down, suggesting the primary downtrends remain intact.

Furthermore, market indexes failed to surpass their primary downtrends, reinforcing the cyclical bear trends from late-last year to early 2022.

The summer rally also faded below the 61.8% retracements from the Nov/Dec 2021 or Jan 2022 to Jun 2022 declines.

The sell signals over the past two weeks suggest they were bear market rallies. Bear market rallies tend to be quick and explosive but not sustainable. The lack of volume on the rallies hints at short coverings.

Last week, markets opened the week with large gap-downs on Monday. The selling escalated into the end of the week with negative outside days on Friday.

This week is setting up to be another crucial week as markets near crossroads.


Maintaining support can trigger technical bounces.


Failure to hold supports warn of retests of mid-June 2022 lows and below the resumption of the primary downtrends.

Enclosed are the converging supports for market indexes:

SPX (4,030.61)

50-day ma = 4,003.5, 7/20/22 breakout = 3,946, 50-61.8% retracements from Jun-Aug 2022 rally = 3,900-3,981, and Jun 2022 uptrend = 3,877

INDU (32,098.99)

50-day ma = 32,078, 7/21/22 breakout = 31,885, 50%-61.8% retracements from Jun-Aug 2022 rally = 31,423-31,969, and Jun 2022 uptrend = 31,043

NYA (15,118.85)

50-day ma = 14,975, 7/27/22 breakout = 15,028, 50-61.8% retracements from Jun-Aug 2022 rally = 14,721-14,945

COMPQ (12,017.67)

50-day ma = 11,971, 7/28/22 breakout = 11,940, Jun 2022 uptrend = 11,842, and 50-61.8% retracement from Jun-Aug 2022 rally = 11,565-11,874

NDX (12,484.32)

50-day ma = 12,484, 7/28/22 breakout = 12,478, Jun 2022 uptrend = 12,326, and 50-61.8% retracement = 12,063-12,380


Source: Charts courtesy of StockCharts.com

Source: Charts courtesy of StockCharts.com

Source: Charts courtesy of StockCharts.com

Source: Charts courtesy of StockCharts.com

Source: Charts courtesy of StockCharts.com

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