By Robert Tuttle
Sept. 25 (Bloomberg) -- Major U.S. equity indexes are poised to fall at least 10 percent after experiencing a “key reversal” by closing lower on the day they rose to nearly one- year highs, according to Chicago-based Technical Analytics Inc.
The Standard & Poor’s 500 Index climbed to 1,080.15 on Sept. 23, the highest intraday level since Oct. 6, and then ended the day down 1 percent at 1,060.87. On the same day, the Dow Jones Industrial Average rose to 9,917.99, the highest since Oct. 7, and ended the day down 0.8 percent at 9,748.55. The Nasdaq Composite climbed to 2,167.7, the highest since Sep. 26, 2008, and ended down 0.7 percent at 2,131.42.
“Make a new high and close lower than the previous day’s close, that’s a very bearish pattern,” Al Bicoff, the president of Technical Analytics, said in a telephone interview. “Conservatively, you could see a 10 percent correction from the key reversal.”. The indexes have fallen for three straight days since setting the intraday highs on Sept. 23. “Now the ball is rolling down the hill,” Bicoff said.
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