Stock Market Technical Indicators & Analysis
A stock tops out long before its earnings do. That is the value of technical analysis. This daily Guppy chart shows that AAPL entered a BWR pattern in early November with all of its shorter and faster moving averages (red) declining below its longer term averages (blue). The media pundits who rely on the fundamentals and news to forecast a likely move are usually late and wrong. Stocks discount the future. So why are all world markets declining? Stay tuned…..
This monthly chart of the SPY tells the story. Below the SPY is the 24.4.4 monthly stochastic. Note that at the 2003 and 2009 bear market lows the stochastic reached oversold levels, well below 20. In the small 2012 and 2016 declines the stochastic fell to around 60. The current reading of 71.79 shows how weak this decline has been. If this Stage IV decline really gets going, the monthly stochastic gives me a way to assess its strength and likely bottom. I am content to be in cash on the sidelines.
