Friday, May 21, 2021

SPX and INDU: Warning in a Normal Market

Two charts today.  Let's start with SPX, which, on May 19, held the next key support zone (which then triggered the current bounce):

The upcoming chart spawned the title of today's piece.  We've previously discussed a bit regarding the unprecedented amount of money the Fed is flooding into the system, which makes this market a (or "an," if you're British) historic anomaly -- an unsustainable deluge of liquidity; a Keynesian dream; an Austrian nightmare.  

However you want to think of it, the current environment is anything other than "normal."

So:  In a normal market, I would take the chart below as a warning to bulls.  In this "market," who knows.

In conclusion, nothing is off the table yet, but the INDU chart at least provides food for thought in these historically-uncharted market waters.  Trade safe.

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