Daily Market Commentary: Pinned by 50-day MA
Courtesy of Fallond Stock Picks
Monday’s bounce ran into the first of its struggles at 50-day MAs. Volume again dropped which is a mixed bag given the indices themselves closed below their intraday highs.
The S&P had a picture perfect reversal off its 50-day MA. The doji implies indecision and suggests Wednesday may finish with lower prices, particularly if the S&P opens the day by gapping lower and below the lows of today.
($SPX)
via StockCharts.com
The Nasdaq was able to close a little above Monday’s close but like the S&P was repelled by the 50-day MA.
via StockCharts.com
The Russell 2000 closed above its 50-day MA, but while this may give hope for bulls there is instead a declining 20-day MA to pressure longs. There was a CCI ‘buy’ signal to suggest there may yet be another couple of days worth of gains to be had.
via StockCharts.com
It looks like shorts are playing the percentages but if there is a drive above the 50-day MA there is a good chance the rally will gather momentum as new shorts are forced to cover their positions.