Let’s Try this Again
14th March 2010
What a difference a week makes. The 50 day MA proved to be more like the ceiling between the 1st and second floor of your house than the ceiling holding up the insulation in your attic. On its second attempt the SP 500 plowed right through it almost like there was nothing there. This time it stopped right at the level of the January highs. We will soon see if this level provides more resistance, or if turns out to be made of paper like the last one.
From a technical point of view, we have now completed the handle portion of the “Cup with Handle” formation. A breakout to the upside could prove to be a good buying opportunity, while a failure should take stocks back down to the 50 day MA once again. We should know a lot more about this market on Monday.
JD
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