The Current Action Is Troubling. When Will It End?

Our last update was on August 26th and the market had peaked on the 16th of that month. Almost a month later stocks are lower not higher. The S&P 500 is now down -10.28% since that close on the 26th of August. The S&P 500 closed at 3640.47 through Thursday. Since the August peak the S&P 500 is now down -15.44%.

Year to date now the S&P 500 is down -23.62% through Thursday’s close as noted above. The prior low on the S&P 500 was -23.07% on June 16th. So the S&P 500 had been in rally mode since mid to late June and mid August but now another correction is underway and a new low for the year.

In our last Bias Indicator update on the major equity indexes, the only periods that had strength were the Weekly (see August 26th Table). Now the all three time periods for U.S. Equity Indexes are below their respective DMA Channels (see September 21st Table).

August 26th Table

September 29th Table

Two month’s ago we noted, “The trick in August is going to be getting the indexes into their monthly DMA Channel first and then above the channel”. That never happened and now the S&P 500 has tested and failed its June closing low at 3671.25 on June 16th.