Tuesday, May 20, 2014

50 DMA Test

The market started to sell off as I had been expecting but I'd like to see the selling break the neckline of the H&S formation to verify the pattern and the waves. The SP500 bounced right off the 50 Day MA and it could maybe put in another shoulder for a "complex H&S" formation. However, the DJI which had been leading the market since April lows closed under the 50 DMA, which it hasn't done since early in last month. Also, the Nasdaq has never been able to recapture its 50 DMA ever since it first started to sell off, so it is likely the SP500 will do the same. May is coming to an end and the World Cup starts next month, so it is the perfect time for bears to come out of hybernation.

I am staying put on my short positions until I see a good level to take some profit/position trade.

For further analysis on RUT, NASDAQ, DJI, Gold, Silver and Oil please visit http://www.ewaveanalytics.com

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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