On Tuesday the popular averages started upward, then tailed off throughout the session to close down. China announced a reduction in car tariffs, but the market may have wanted more. Significant macroeconomic reports were nonexistent. Meanwhile, the price of crude oil fell while that for gold rose.
Above is my 3-month chart of the S&P 500 exchange traded fund (SPY). Its 200-day moving average essentially provided support in early February, late March-early April, late April and early May. During the intermediate periods the SPY’s 50-day moving average was overcome several times before the price was thrust back below.
The successful testing of the SPY’s 200-day MA in February, March, April and May indicated it was going through more of a grinding correction than a collapse. The strong upthrust from it on May 4 was encouraging enough to turn my weekly outlook arrow green. The jump above its 50-day MA on May 9 repainted the other arrows. The continuation kept them that way. The bobbing around in recent days has not been enough to cause me concern.
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