Market On Open, Wednesday 3 September

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One Red Day. There May Yet Be More.

by Alex King, CEO, Cestrian Capital Research, Inc

For a moment there yesterday, we almost had a MARKET CRASH because the S&P500 lost its 21-day exponential moving average. Fortunately buyers stepped in and quickly overwhelmed the rising panic, whereupon order was restored by the close and things were looking much less like 1929. Phew! Then, Google turned out to be Still Not Evil according to a court of law, seeing $GOOG +6% and $AAPL up a little too as a result of ongoing anticipated benefit. All told, the apocalypse was delayed for at least one day.

But remember that color at the top. Red. We may yet have more of it this month. In the charts below, those moving average lines are useful tripwires to put you on notice.

• Red line - 8-day simple moving average. The first such tripwire for long positions.
• Green line - 21-day exponential moving average. An important line. First daily close below that, be ready for more down.
• Blue line - 50-day simple moving average. A critical support zone. If the 50-day is lost, bad things can happen.
• Purple line - 200-day simple moving average. THE line in the sand. To quote everyone ever, “nothing good happens below the 200-day”.

So, duly armed, let’s get to work. As usual we cover equity indices, key sectors, bonds, volatility, crypto, oil and more below.