The selloff in US equities which began after Powell’s speech on Friday gathered pace yesterday with the three main indices ending the session deep in the bear pit, writes Ian Murphy of MurphyTrading.com.
Click the chart to enlarge
The S&P 500 (SPX), NASDAQ (NDX), and Dow Jones (DJI) (left above) are well below the -1ATR line on a daily chart and starting to flirt with the -3ATR. The Russell 2000 (^RUT) and Dow Transports (^DTX) (right) are not far behind, while the Dow Utilities Average (^DJU) is struggling to remain in the neutral zone having found support on its -1ATR twice.
For now, it’s a matter of sitting tight and waiting for the next bounce, unless you are short the market in which case you need to start thinking about targets. The -3ATR on a daily chart is a good place to start.
Learn more about Ian Murphy at MurphyTrading.com.
