The Stock Market's Ominous Cough

May 8, 2019

This week’s 900-point selloff is technically very similar to the 1000-pointer that occurred between February 25 and March 11. Both exceeded two prior lows on the daily chart, generating bearish ‘impulse legs’ in the process. Now, even if the Dow should recover much or most of it in the days ahead, it would not change the troubling fact that two diving feints occurred within such a short time span. This is akin to that ominous cough in the second reel of a Hollywood melodrama.

The bull’s vital signs are failing, and for a score of reasons that I’ve written about here,  it seems an unlikely time for stocks to get second wind. Even so, I will continue to stick closely to big-picture technicals that. at least theoretically, still give the bull still plenty of room to run. The picture would change dramatically for the worse, however, if the Indoos were to fall a further 757 points, or 2.91%, exceeding 25,208 to the downside. A corresponding drop for the S&P 500 Index would be 163 points, or  5.65%. As for the Nasdaq (QQQ), still trading near last autumn’s record highs, a 17-point drop to 169, or 9.1%, would likely be the death knell for the aging bull. 

Click here for a free two-week trial subscription that will give you access to all paid features and services of Rick’s Picks, including daily, actionable trading recommendations and a ringside seat in a 24/7 chat room that draws veteran traders from around the world.


The Fourth Coinage Act of 1873 embraced the gold standard and demonetized silver, known as the “Crime of 73”

Silver Phoenix Twitter                 Silver Phoenix on Facebook