Stock Market Remains Fragile, Charts Show
However, in a broader sense, I do not believe this market is out of the woods, near term, until a daily settlement above 1,402 is posted. Until such time, risk of a further downside correction remains in play.
Our previous assessment to our readers was stated three weeks ago: "For the week ahead, if the market approaches the 1,410 region, I would expect that area to be the upper limit of this move, and a retrace toward 1,360 to follow." Thus far, we have been pretty much spot on. If you recall, I stated I would short the index on a daily close below 1,388. Traders look for a congestion zone between 1,355 and 1,410 to develop over several months as a trading range.