I’m not recommending trying to pick a top, but I am emphasizing pattern watching. I’ve been tracking the predictions of a crash or a correction on social media and I’m seeing traders feed the bull by selling rallies because of high RSI readings, but none of that is working right now. I believe the best sign of a top will be a break in the pattern. It could be a closing price reversal top, a two-day top or the failure of a swing bottom, but something will eventually tip us off that momentum is shifting.
As far as the crash predictors are concerned, study your history. In 1987, for example, the S&P 500 topped on August 25 and it didn’t crash until October 19.
What to Watch
McDonald’s, Shake Shack, Planet Fitness, Datadog, and Peloton all report before the opening bell. Jobless claims, productivity data, unit labor costs, and consumer credit numbers are also on the calendar. But oil is still the bigger story for stocks right now. If crude keeps breaking lower and the market starts believing the Iran war is winding down, traders are going to keep pulling money out of defensive energy positions and pushing it back into growth. That is what Wednesday looked like. The bulls still have control and the pivot support levels are where I’d watch for any sign that changes.
More Information in our Economic Calendar.
