In One Chart: Here’s a 10-step plan the stock market must complete to get back on track

The S&P 500 needs to follow a 10-step plan to get back on track, according to one technical analyst.

The stock index so far has completed just the first three steps, reckons the analyst, Instinet’s Frank Cappelleri, as he reflects on its recovery since last week’s selloff.

“We like to cite this list near prospective bottoms,” the Instinet executive director wrote in a note late Monday, sharing the rundown shown below.

“And since we haven’t seen one in quite some time, here’s a refresher. The steps in bold have been achieved.”

A plan for the S&P 500.

Cappelleri said the list — featured in MarketWatch’s Need to Know column — “has proven useful, especially during those ultimately ‘fake’ face-ripping rallies that appeared in late August ’15 and late January ’16.”

Check out: Fed’s Mester says economy will work through latest market turbulence

And see: Investors have yet to grasp the long-term implications of budget deficits

Step 9 is “Make higher highs,” and Cappelleri’s chart below shows how the S&P SPX, +0.26% is still delivering lower highs — a classic sign of a downtrend.

No higher highs yet.

Now read: Here’s the nagging question at the heart of the stock-market selloff

This report was first published on Feb. 13, 2018.

Filed in: Top News Tags: 

You might like:

Americans owe millennials an apology — baby boomers overspend eating out too Americans owe millennials an apology — baby boomers overspend eating out too
BookWatch: Here are the 8 best books about money published in the past year BookWatch: Here are the 8 best books about money published in the past year
Key Words: The financial advice Billy Graham liked to give Key Words: The financial advice Billy Graham liked to give
Outside the Box: The 3 most surprising things I learned when I got serious about early retirement Outside the Box: The 3 most surprising things I learned when I got serious about early retirement
Market Snapshot: Why a spike in the 10-year Treasury yield to 3% won’t be a death knell for stocks Market Snapshot: Why a spike in the 10-year Treasury yield to 3% won’t be a death knell for stocks
States that voted for Trump are more likely to have growing credit-card debt States that voted for Trump are more likely to have growing credit-card debt
CEO turnover is the highest it’s been in 8 years CEO turnover is the highest it’s been in 8 years
The depressing reason most Americans are making more money The depressing reason most Americans are making more money

Leave a Reply

Submit Comment
© 3052 Stock Investors News. All rights reserved. XHTML / CSS Valid.