A Wobbly World - Market Review

Aug 25 19:08 2019 Print This Article

Another week, another lower close. With four weeks of lower closes, the trend continues to be down. While we have made higher lows the last two weeks, it now appears that the early August low will be tested. One of the defining features of corrections/bear markets is an increase in the average true range. On that note, look at how small the weekly bars were on the way up compared to the last four weeks.

Friday's price action on the indexes was a road lower as more news came out regarding trade. I continue to worry about trade volumes as we start to see the rails underperform. I wrote about the rails a few weeks ago, but the chart continues to break lower in relative strength. Notice when railroads underperformed based on the purple area on the chart, as well as when the PPO went below zero (showing negative momentum). Friday shows the PPO just a smidge above zero. In October 2018, the relative strength uptrend in purple didn't break, even though the price trend did. Now, the relative strength is broken as price falls below the trend line.

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StockCharts.com was founded in 1999 by Chip Anderson, a 10-year veteran of Microsoft. StockCharts.com is a website that provides online investors with high-quality financial charts for making better investing decisions. StockCharts.com is focused on Technical Analysis - the study of price history via charts. They provide award-winning analysis tools, market commentary from respected analysts like John Murphy and Martin Pring, and a huge collection of educational resources that can help anyone become a better, more informed investor.

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