There's no doubt about it, yesterday was a very ugly day in the stock market. Is this a harbinger of things to come?
Now that the market has the Alibaba Group Holding Limited (NYSE:BABA) IPO out of the way, there really seems to be no more magic to propel this market higher, at least in the short term.
Yesterday CNBC reported that the Russell 2000 index had flashed the "death cross". A "death cross" occurs when the 50-day moving average crosses below the 200-day moving average. Previously this has not been a big deal with this particular index, as it has always recovered a short time later. In light of what's going on and geopolitical concerns, this time may be different and may represent a harbinger of things to come.
The Middle East is another negative for stocks, as late yesterday Saudi Arabia, Jordan, the United Arab Emirates, Qatar and Bahrain joined the US in a series of airstrikes against Islamic State positions in Syria along the Iraqi border. How long will it be before the US has boots on the ground?
As the markets chop around and seem to lack direction, sometimes the best thing to do is just be patient and wait for something to really make the markets move. Yesterday I discussed negative divergences, as we saw many of the formations setting up which can be an early warning signal of things to come. Continue reading "Was Yesterday A Harbinger Of Things To Come?"
