The stock market is set up for a relief rally. Don’t chase the bounce, says technician.
The August downtrend in stocks extended through a third consecutive week as of Friday’s close after Federal Reserve chair Jerome Powell said at the Jackson Hole economic symposium that it is still unclear if interest rates will need to rise further as policy makers remain unsure of whether more rate hikes are needed, said Tyler Richey, co-editor at Sevens Report Research.
Friday’s “whipsaw drop to new lows for the week” on the S&P 500 futures ES00, 0.18% was not confirmed by new lows in the RSI indicator, which means the market is setting up for a potential relief rally to start the new week with resistance at a range of 4,465 to 4,515 in focus, Richey said.
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