Thursday, March 27, 2014

Potential 50 Day Moving Average Test

The market put in a lower low today at 1842 and went into a triangle the remainder of the day.  One could argue for a bounce from here since we have what looks like an expanded flat in the cash market. However, the index is so close to the 50 DMA and today's triangle gives the market enough of a correction to put in another bearish leg to at least 1834 or basically the low that was put in couple of weeks in pre-market.

I am staying in cash and will go long if we get the 50 DMA test as there is a good chance the market could rally hard from there (to the TA). If the prices break out of the triangle to the upside then the 50 DMA target will be invalidated for the time being.

Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

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