The market continues to selloff and the bears seem to be taking control, but the bulls have not yet lost the war. Yesterday the Nasdaq futures came just short of testing their 150 day smooth moving average and unchanged for the year and then they popped. As long as the Nasdaq can sustain trade above that area then I think that the market may start to work its way back up. The Dow is back below….. their 200 day moving averages but still strongly in positive territory for the year and also trading above their 50 day and 150 day smooth moving averages. As long as the Dow can hold those moving averages and can sustain trade in positive territory for the year I think that the market could start to work its way back up. The S&P on the other hand is trading weak. The cash is now trading below all of their major moving averages and they are still in negative territory for the year. This is bearish action and unless the S&P cash can get back above their 50 day and 150 day smooth moving averages I think that the advantage goes to the bears. The Transports are also trading below all of their major moving averages and but are poised to open near their 150 day smooth and 50 day moving averages on today’s open. If they can get back above those moving averages then I think that the market could add to their overnight gains and the S&P cash could look to retest some of their moving averages. If they cannot get back above those moving averages then I think that the markets will selloff. Today I will be initially looking to sell rallies up to resistance at 1226.25 (keeping a close eye on the 150 day smooth and 50 day moving averages in the cash) and I will be looking for us to test support at the daily pivot (1214.25) to the TOV where I will be a buyer. If we cannot sustain trade above the daily pivot I will turn seller and then be looking for the market to fill the Gap and then possibly test the HVB and support at 1202.50 where I will be a buyer at those areas. Failure to hold support at 1202.50 I will turn seller and then be looking for a test of support below at 1190.50 where I will be an aggressive buyer. If we cannot sustain trade below resistance at 1226.25 I will turn buyer (the cash will then be above their 150 day smooth and 50 day moving averages) and I will be looking for a test of resistance above at 1238.00 where I will be an aggressive seller. Have a great day!

Written by Anthony Crudele

This entry was posted on December 15, 2011 at 8:04 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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