In the short term, the Naz is oversold, and I'm looking at the same support levels you are. Sentiment indicators are oversold, too, in the short term.
But look at the monthly chart for the COMPX for a much longer-term view. Funnily enough, the composite is only at the right shoulder of a large H&S pattern. You can see all the possible support levels on the way down, back through the roarin' 90s: 1387, 1357, 1125, 1008, 959, 691 (from '94), etc.
Incidentally, the longer-term MACD on the monthly chart is oversold, not overbought. And completion of the H&S pattern would take years.
Another interesting little fact: The Dow broke under the 50 SMA on the monthly chart in Sept. of last year. It hadn't done that all through the '90s. It succeeded in climbing back above it, but this month, it fell below it again.
The SPX hit the 50 SMA in the monthly chart in 1990. It reamined above it all through the '90s and fell below it in March 2001. It rallied above it briefly and breached it again in August of that year, before the attack of September. It hasn't climbed back above it since then. Again, the oscillators for the monthly chart of the SPX are oversold. But the price pattern and support levels might raise some longer-term concerns. By longer-term, I mean years. |
