Robert Sinn on the Technical Picture

Robert Sinn is one of my more crucial reads for this market moment as he is the only blogger (that I know of) who is both a technician and exceedingly knowledgeable about the European debt crisis.  He’s begun doing a weekly letter at his site The Stock Sage and this week he tackles both topics…

Here’s Robert’s take on the technical picture…

The technical structure of the equity market took a significant turn for the worse last week as many breakouts decisively failed and the S&P 500 fell out of its symmetrical triangle to the downside. Moreover, several key market sectors ($COMPQ, $QQQ, $XLF) closed the week below their respective 50-day simple moving averages (SMAs) and fell out of an assortment of potential continuations patterns (flags, pennants, triangles, etc.). The market was attempting to climb a steep wall of worry for several weeks, the wall turned out to be too tall and the bulls gave up out of exhaustion late in the week.

The charts need time to regroup and heal themselves after last week’s damage, perhaps most importantly, the weakest sectors (financials and tech) need to find a bid soon – I will be focused on whether the S&P 500 can stay above 1200 and more importantly its rising 50-day SMA in the week ahead.

Head over for the whole letter and be sure to keep Robert in your reading list.

Source:

Sage Weekly Letter (Stock Sage)