I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.
So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.
