Dear all,
Previously, I mentioned in my write-up dated 21 Mar that I am avoiding the event risk of the U.S. tariff package against Chinese (click HERE). This proves timely as S&P500 fell 129 points, or 4.7% from 2,717 on 20 Mar to close 2,588 on 23 Mar.
At 2,588, S&P500 has made its first close below its 200D exponential moving average (“EMA”) since Nov 2016. Why and how is this significant? During the sharp 10% drop in the first part of Feb 2018, S&P500 has not closed below its 200D EMA. Furthermore, most technical analysts are watching this level closely (some may use 200D SMA (currently around 2,585; click HERE). A sustained break below this is extremely bearish.
Should we run for the hills? Let’s take a closer look at the chart and my personal action plan ...
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