Download the Schwab app from iTunes®Get the AppClose

  • Find a branch
To expand the menu panel use the down arrow key. Use Tab to navigate through submenu items.

Midweek Market Trend for March 21, 2018:

Follow us on Twitter @Schwab4Traders. For more technical insights, join my weekly webinar, Charting the Markets, where I provide market analysis and answer your trading questions in real time.  

(Note: This post was written prior to the Fed Announcement on March 21, a potential market moving event.)

Volatility returned with a vengeance on Monday as the markets sold off hard with technology stocks leading the way down. The selloff inflicted some technical damage as the S&P 500 lost its 50 day moving average (Figure 1)(A). However, another widely watched moving average, the 100 day, held and should offer some support going forward (Figure 1)(B).

Figure 1:

LeeBlog 3.20.18 Fig 1

Source: StreetSmart Edge®

A more positive sign was the action of the Russell 2000 small cap index. It tested and held its 50 day moving average (Figure 2)(A).

Figure 2:

LeeBlog 3.20.18 Fig 2

Source: StreetSmart Edge®

And, in spite of the weakness in some of the internet stocks, the NASDAQ composite managed to hold its 50 day moving average as well (Figure 3)(A).

Figure 3:

LeeBlog 3.20.18 Fig 3

Source: StreetSmart Edge®

The action of the VIX was also interesting in Monday’s decline. The VIX rose sharply during the day but then came back down towards the close, producing a long “tail” on the chart. (Figure 4)(A). This behavior has often led to short term lows (Figure 4)(B)(C).

Figure 4:

LeeBlog 3.20.18 Fig 4

Source: StreetSmart Edge®

Turning to sector action, the internet stocks which had been leaders throughout 2017, suffered a bout of selling on Monday that is continuing today (March 20, 2018) (Figure 5). Notice how they have been underperforming the overall tech sector since early February (Figure 5)(A).

Figure 5:

LeeBlog 3.20.18 Fig 5

Source: StreetSmart Edge®

The semiconductors, another group that led the market in 2017, managed to hold critical support on the close Monday (Figure 6)(A). They also stayed above their 50 day moving average. It is important for the overall market that they continue to trade well.

Figure 6:

LeeBlog 3.20.18 Fig 6

Source: StreetSmart Edge®

A bright spot in the market has been the action in the trucking stocks. As of this writing they appear to be breaking out of an ascending triangle chart formation (Figure 7)(A).

Figure 7:

LeeBlog 3.20.18 Fig 7

Source: StreetSmart Edge®

The Comprehensive Schwab Guide to Buying and Owning Gold
The Comprehensive Schwab Guide to Buying and Owning Gold
Consider Closing Short Options Commission-free
"Consider Closing Short Options Commission-free

Schwab has tools to help you mentally prepare for trading

Learn more >

Talk trading with a Schwab specialist anytime.
Call 888-245-6864
M-F, 8:30am - 9:00pm EST

Get 500 Commission-Free Online Equity and Options Trades for Two Years

Learn More >

Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. Examples are not intended to be reflective of results you can expect to achieve.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions.

Past performance is no indication (or "guarantee") of future results.

Schwab does not recommend the use of technical analysis as a sole means of investment research.

Indexes are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly.


Thumbs up / down votes are submitted voluntarily by readers and are not meant to suggest the future performance or suitability of any account type, product or service for any particular reader and may not be representative of the experience of other readers. When displayed, thumbs up / down vote counts represent whether people found the content helpful or not helpful and are not intended as a testimonial. Any written feedback or comments collected on this page will not be published. Charles Schwab & Co., Inc. may in its sole discretion re-set the vote count to zero, remove votes appearing to be generated by robots or scripts, or remove the modules used to collect feedback and votes.