Classic Retrace In Progress
The markets are fading off the highs of the day as lingering global fears persist. In addition, this is a classic retrace back higher after the major drop last week. A retrace states that after a significant two or more day move, the market or stock making the move will jump in the opposite direction but stay inside the original move. After the retrace completes, the market or stock heads back in the original direction.
After putting in a major pivot top last week, the markets fell for two or more consecutive days. After a bounce on Friday and initially today, the markets have started to slowly fall again. Is this a classic retrace over the last two trading days? Is the market going to start to move lower again? It is possible.
There are some major stocks showing weakness today. Amazon.com, Inc. (NASDAQ:AMZN) is dropping sharply, trading at $172.31, -4.93 (-2.78%). In addition, the financial sector has turned to the negative side, leading the markets off their highs. Goldman Sachs Group, Inc. (NYSE:GS) is trading at $164.27, -0.50 (-0.30%) while JPMorgan Chase & Co. (NYSE:JPM) is trading at $46.52, -0.16 (-0.34%).
The next few days will be pivotal in terms of seeing if this retrace back up is just a setup for another move lower. Continue to watch the 52 week highs on the S&P 500.