The chart monkeys were sweating bullets today because the casino’s safety blanket is in danger of falling off the ledge. We are talking about the 200 DMA of the S&P 500, which sits at 2768 and has been the site of hand-to-hand combat among the robo machines for nearly two weeks now.
But this morning the index sliced through its guide rails, plunging to a low of 2690 (3% below the 200 DMA). As the trading day progressed, the machines and cheerleaders of bubble vision took turns coaxing it back to safety, but it was not to be—with the index closing at 2740.
So unlike the February, April and May swoons earlier this year, which all perfectly bounced off the magic 200 DMA (as shown below), this time was different. Both the carbon and silicon units finally went home worried about what comes next.