This was a disappointing day for the bulls from a technical standpoint. All three of the indices which I usually track fell back under their 50-day moving averages. They also gave back all of yesterday's enthusiastic, bank & financials fueled rally. The fact that today's selling came on decreasing volume is small consolation.
The bulls tried hard to support the S&P 500 at 850 but late day selling pushed it back below that highly watched level. This is looking like a classic retracement to the 50-day moving average before resuming the downtrend.
The S&P breaking its 50 DMA didn't really surprise me since it closed just a few points above that line. The Nasdaq's break of its 50 DMA was surprising to me given how it looked like it was ready for blastoff by gapping over it yesterday. I guess we can chalk yesterday's buying up as a one-day wonder.
A similar story for the small caps.
The financials are having a big impact on the day-to-day broader market moves. The XLF chart shows just how helter skelter they've been recently. The gaps in the underlying stocks have been insane. This is the kind of stuff that makes me glad that I don't hold stocks overnight anymore. The index sure seems drawn to last week's gap, which is also around the November closing low.
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down | Down | Down |
| Intermediate | Lat(-) | Down(-) | Down(-) |
| Short-term | Up | Up | Lat(-) |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
One-day wonder until the GDP numbers turn out so bad that they have to be bought...
XLF - island reversal - just a thought
good point gmarg. I don't know how I missed that
Mike, are you using SMA's or EMA's for your DMA's? ...BTW, your link section is always top-notch...thanks.
Thanks Charles. I use simple moving averages on the charts I post in the recaps.
Any particular reason for going with the SMA's over EMA's?
Not really.
Do you think we will retest the Nov. lows?