Markets hate uncertainty more than bad news, which is one reason they've swooned recently. But technical analysis looks at the patterns deeper than the daily news, and charts suggest a real bear ahead.
The dollar-stocks see-saw -- in which the two move in opposite directions -- seems to be holding up. And over the longer term, there's good reason for the dollar to stay on its recent upward trend, which would be bad news for stock prices.
Financial markets are becoming increasingly schizophrenic, ruled by erratic ups and downs. It's at times like these when technical analysis can help investors manage the emotional roller coaster, which is why for chart watchers, the catchphrase of the next few months could be "mind the gaps."
Technical analysis is indicating that last week's indecision will be decisively broken shortly by either the bulls or the bears. But which move is more likely? That's where the charts seems to be flashing a very clear alert that bulls should be aware of.
Having hit 1,150 on Friday, the S&P 500 is now at a crossroad: Will it fall back, or continue marching up to the next technical target around 1,200? No one chart can say for sure, but here are some points to be aware of -- and to watch in coming days.
The frustrating truth about technical analysis is that it requires interpretation. Ideally, a stock chart would only be able to be viewed one way, shouting "buy" or "sell." But as the saying goes, "If it were that easy, we'd all be millionaires."
After spiking in May on dismay over Eurozone debt anxiety, the VIX has been trending generally downward, with any jumps being only short-lived. Another spike just occurred. The thing to watch now is if the VIX follows this recent pattern -- or not.
Investors are reeling after Wednesday's global decline in the equity markets, as the Dow fell 265 points and the S&P 500 lost over 2%. Some key charts suggest that the battle between bulls and bears is approaching an important turning point.
The market has been up and down for the past few months, lacking a clear sense of direction. Is this the new normal, or just a pause in an uptrend? Technically, a strong case can be made that it is the latter -- a typical retrace in a longer bullish trend.
Bearish technical indicators clearly outnumber the bullish signs, and the unsettling drop in consumer sentiment is a particularly dangerous harbinger. But now that bears are ascendant and pessimism rampant, it could also be time to become contrarian.