Momentum Monday – The Bears Are Still In Charge

The charts on Momentum Monday are powered by MarketSmith

The month of May wasn’t kind to equities. No matter how you slice it, the market doesn’t like protectionist policies and it is likely to keep going lower until all the tariff insanity is put to rest.

SPY closed below its 200-day moving average. The next level of potential support is near 270. The 200dma and 280 are now levels of potential resistance.

The small-cap index, IWM continues to show relative weakness. If it loses 145, it is likely to drop to 140 before dip buyers and short coverers step up. The most dangerous condition in the market is when an index is oversold near an area of potential support and it doesn’t bounce from there. This is a recipe for panic selling.

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