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U.S. Indices Fragile As Risk Appetite Wains

By Anna CoullingStock MarketsSep 14, 2021 02:46PM ET
www.investing.com/analysis/us-indices-fragile-as-risk-appetite-wains-200601919
U.S. Indices Fragile As Risk Appetite Wains
By Anna Coulling   |  Sep 14, 2021 02:46PM ET
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ES Emini Daily Chart.
ES Emini Daily Chart.

Labored would best describe the progress for U.S. indices at the moment, as they continue to cling to the longer-term bullish trend – but increasingly, with narrow spreads, weak rallies and short-term reversals the order of the day.

From a volume perspective, this is all seen as rallies on falling volume, and falls accompanied by rising volume, with Doji candles punctuating the stuttering performance. This aspect of price behavior is also one that is mirrored in the yen complex, as the primary risk pairs struggle to break free of longer-term ranges and find any degree of positive momentum.

The daily chart for the ES Emini is one example, but we could take the NQ Emini or YM – they all paint a similar picture. 

On the ES daily chart note the recent move lower on the rising volume of last week, with Friday’s candle confirming with the effort to rise duly capped and closing with a solid red body and deep upper wick. The start of the week saw little improvement in longer-term sentiment, with extreme volume associated with the Doji candle, hardly a sign of great strength and reinforcing the current picture, which is fragile at best in terms of risk-on sentiment as the index clings to gains made over the summer months.

The question is whether we are reaching a major top, and the technical picture is certainly shaping up this way as risk appetite drains away. However, what I believe we will see before this takes hold are further strong reactions lower, followed by weak recoveries that will then be the pre-cursor to a distribution top and the climactic action of a major reversal.

U.S. Indices Fragile As Risk Appetite Wains
 

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U.S. Indices Fragile As Risk Appetite Wains

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Comments (2)
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Sep 15, 2021 2:17AM ET
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Taper or No Taper, game is over.What Dr. Jerome Bubble said transitory inflation was the inflation due to 2020 low Covid base. But Dr. Bubble is aware of the stimulus lion 🦁 he is riding on. The real inflation is yet to begin when taper starts. Inflation Lion will get him sooner or later. So Dr. Bubble is more likely to act sooner in September because the lion might let him walk free if he gets off the lion sooner than later. Dr. Bubble and the Lion - will be a story in children's book on how not to do monkey tricks with the US economy
Edochie Gabriel chiadi
Edochie Gabriel chiadi Sep 14, 2021 4:50PM ET
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