The #MAGA Stock Market Trendline Is Broken
by Jesse Colombo via RealInvestmentAdvice.com,
ZeroHedge.com
Thu, 10/25/2018
It was another red day in the markets with the Dow dropping 608.01 points or 2.41% and the S&P 500 dropping 84.59 points or 3.09%, which means that both indices are now down for the year. As someone who is warning about a dangerous stock market bubble (please watch my presentation to learn more), market behavior like this makes me very concerned. Even more concerning is the fact that the major U.S. stock indices have broken below their important uptrend lines that have formed in early-2016. These uptrend lines have guided the U.S. stock market higher for the past couple years during the phase of the stock market bubble that occurred after President Donald Trump won the election (hence why I call it the “#MAGA [‘Make America Great Again’] trendline.” The breakdown of this trendline signifies a very important change of trend.
Today’s sell-off caused the S&P 500 to break below its uptrend line that began in early-2016. For further confirmation, I want to see if the index stays beneath this level by the close of trading on Friday. The next major technical support and price target to watch is the 2,550 to 2,600 support zone that formed at the lows earlier this year.
Unlike the S&P 500, the Dow Jones Industrial Average has not yet broken below its key uptrend line. If the Dow closes below this uptrend line in a convincing manner on the weekly chart (possibly in the next couple days if the sell-off continues), the next important support level and price target to watch is the 23,250 to 23,500 zone that formed in early-2018.
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