Thursday, June 16, 2011

Long Term trend tested today

The market put in another lower low today and it tested the 200 moving day average at 1258, which is the long term trend indicator for the S&P. Buyers defended this support and I wouldn't be surprised to see a rally tomorrow as buyers tend to buy when this level is tested. If this level does not hold then we will probably see a sell off since many institutions start selling when this level fails to hold. So the next few sessions will be interesting. The TA is at 1278 so technically we are reaching a point where the market will either rally hard or sell off. But as you know, given the oversold conditions, 6 weeks of continuous selling and extreme bearishness. I favor a rally at this point. And I will step in on margin once the trends confirm.

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