back to blog homepage

34-day Moving Average Holds Trend

sp-500-trend

As you can see on the chart above, the candlestick on the chart that represents today did in fact sell-off, and you can see the tail touching the 34-day moving average before rebounding strongly – but still in losing territory for the day.

Since the March lows, the 34-day exponential moving average has consistently provided a support level for the market. Only twice have we dropped below it and not immediately rebounded (that was in the June consolidation of the uptrend and again briefly in the October consolidation of the uptrend.

Given that today was a shortened trading session and that much of the senior Wall Street trading staff were on a 4-day weekend, its tough to say what the real fallout would have been if it was a normal trading day. However, today was not nearly as bad as the futures overnight projected. We were projecting a down 300 day on the Dow Jones Industrial Average, but we ended down half of that.

Monday will be the telling sign, and the overseas markets will lead the way as Asia and Europe both open for trading well before we do.

As I’ve written before, the low volume has been bothersome for me. You can see that we have had several sessions in a row that have been below average (the blue line on the volume chart) which indicates that many of the big institutions have been sitting out much of this month’s activity.

We had no stop losses trigger today, which is probably good given the knee jerk selloff then move higher – but we came very close.

Monday we’ll see how things turn out.

Mark