Market Week 49
This week’s start was a strong sell-off. Within two days we have seen EMA(20) and also EMA(50) on major indices. The market still trying to get back to highs but so far the up movement slowed. This could be a nice trend reversal if we breach the former lows. Don’t forget the last year’s December downward movement which is still in the minds of the trader communities. Will it happen again? Let’s try to find out:
Breached the local trendline on Monday. Still not got back to highs. One could find this chart on Finviz as well and on these charts, we have two lower lows. This means the uptrend is over for the short term. The red support line held. Also, EMA(50) got the price. Right now the EMA(20) holds as resistance blocking the price from reaching the highs. On the upside: Still in an uptrend on the major upline.EMA(200) is still far away.
This index is much stronger than the Industrials. There are two lower lows lately but not that deep like in the INDU index. This index remains above EMA(20).
Russell is still above the red line which was tested and worked as a support level. The second swing is a cause for concern. Not that forceful, it looks like not gonna make it to a new high.
The correction is here in full force. Maybe this was too aggressive but after two days it stopped. This was a nice reminder that how easily gains could be erased within a few days. December is not the best month to trade. I would suggest tight stops and not many new positions.