Three Charts Clarify a Cautious Outlook for Stocks

Aug 02 21:08 2019 Print This Article

“Never confuse brains with a bull market.” 

When the market is going higher and the average stock is appreciating, we often attribute the gains to our skill as investors. Due to our incredible investing prowess, we have managed to own stocks that are doing well!

However, when the uptrend starts to reverse, we often attribute those losses to forces outside of our control. It’s the market just moving against you, or even just plain bad luck.

Market uptrends are easy. Market downtrends are when bad habits and inconsistencies in your investment process can start to have a real drag on your performance. Having said that, here are three charts that I would argue should cause you to review your portfolio with a more cautious perspective.

First, the S&P 500’s Friday low lined up with the low from the end of June, as well as a 38.2% Fibonacci retracement from June-July 2019. This confluence of support levels suggests a potential short-term bottom as the market digests this week’s losses.

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Stockcharts.com

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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