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MKM’s Chief Market Technician Katie Stockton says that the S&P 500 will see a pullback before it hits a new high.
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Or the S&P 500 hits new record stemming -- case Stockton and Kay and partners chief architect essentially -- I -- -- says this chart it's the S&P 500 over the last year.
The Blue Line is the 200 day moving average -- only dipped below that level twice ECB index is.
Showing a loss of momentum just in the last month correct.
That's right three essentially stalled -- -- base and that's and 500.
And as based obviously have -- -- and volatility that pick up and volatility is more characteristic get traction -- We've already seeing fractions globally say if you look at European benchmarks.
Asian benchmarks they've all pulled back and fairly significantly and we really have not yet.
And I see this loss of momentum -- as an issue -- then weeks ahead.
Looking for extraction can really refresh the longer term -- trend.
When you say refresh the longer term uptrend do you mean that you see enough momentum behind the last year's performance in the broad market average to shoot it well above.
That all time high marker.
I do this idea expected break at -- new all time high by the S&P 500 after traction days.
So often these actions helps refresh the buying interest in the market.
Positive long term momentum with some benefits the uptrend and I don't expect that to change strainer traction.
But what's happened is that we become -- -- over extended or overbought people like to call it.
And I'll get more aggressive on the buy side with buy recommendation.
When we see oversold conditions become more widespread -- right now for example about 4% and S&P 500 is oversold basement on in my measures.
And we tend to see that measure peak around 30% snow that could happen in the matter of three to four weeks -- south and it typically does and that's what I'm expecting this time around as well.
All of that said let's put back our initial chart if you will that moving average 200 day moving average the S&P -- For the last year or so because you're talking about this correction -- anticipating.
Yet we're still comfortably above that 200 day moving average just and not just in the last month but -- in the last two or three months right so.
Is that.
Give you more confidence in the overall health of the S&P -- Certainly in the long term uptrend now Chris moving averages are lagging by nature.
But the 200 day does tend to give you good indication of this slope but the long term Matt can and that's what it's doing on that chart there.
Sometimes it does act as support as it did last November of course.
This time I think -- 200 day moving average will not be tested it's around 1412 I believe.
As that today I don't think we'll see traction that dramatic in nature.
I'm looking for a -- action into the 1425.
To 1465.
Range let's -- that about three to 6% below current levels.
Okay sign -- technicals are your expertise solve these numbers and milestones level support levels resistance levels.
But can you tell me any of the fundamental -- and that the real risks here to market what are you looking at outside of these actual charts.
Is that Europe is it China is that they US fiscal mess let it -- -- -- what sort of things -- taking consideration.
Well there's very something right and for managing it I do just look at charts and China is an issue -- at least -- gap down in the Chinese benchmarks today.
And that I take issue it because it does suggest that there's worse and come from the emerging markets like China.
The loss of momentum has been fairly significant -- there's of course reasons for that so with support levels below current levels I still think there's some downside risk and I'd be hedged into that.
And selectively adding some short exposure as well.
Appreciate your advice Katie stopped and some more bad news for Greece Russell investments has reclassified.
The debt ridden country from developed.
To an emerging market Greece has failed one or both of Russell's economic and operational risk assessments each year since 2011.
The fund manager which designated Greece and developed nation in 2001 says.
Since the country began revealing unstable levels of public debt in 2009.
It has been in an unfortunate economic tailspin -- at times has threatened to pull apart the entire European monetary union.
Any opportunities in the Greek economy have become inherently riskier exposures for global investors.
Speaks you know what -- emerging.
