The S&P 500 closed below its 200-day EMA for the first time since Brexit and this marks strike two for the bulls.
Notice that the bulls also had two strikes in late June when the index broke the May low and closed below the 200-day EMA. This two strike count led to one of the best mean-reversion trades of the year. This is not a prediction, but I am saying that we should not count da bulls out just yet because the fat moving average has yet to sing.
Strike three would be the 50-day EMA moving below the 200-day EMA. Note that the S&P MidCap 400 and S&P Small-Cap 600 are below their 200-day EMAs as well, but their 50-day EMAs remain above their 200-day EMAs. The red areas mark the first resistance levels to watch.
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