Market Week in Revue

The market closed out the week higher despite a mid week pullback. Bulls continue to buy any weakness, and what looked like the beginning of another pullback quickly vanished. The markets have been on a tear since February and have remained well above their 20 and 50-day moving averages the entire time. In fact, the market indexes have not closed under their 10-day moving averages for several weeks. Despite the strength, there are some cracks starting to show, so a little caution is called for moving forward. While a bearish stance would not be appropriate considering the price action over the past year, now would not be a prudent time to be chasing the market higher. After the market digests some of these gains I will look to add to positions on weakness.

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Pullback

What Does Pullback Mean?

A falling back of a price from its peak. This type of price movement might be seen as a brief reversal of the prevailing upward trend, signaling a slight pause in upward momentum.

Investopedia explains Pullback

Often pullbacks are seen as buying opportunities after a security has had a large upward price movement. It is important, however, to analyze closely any pullback as it may be a sign of a definite trend reversal or a slight pause in the upward trend, each having very different trading implications.



Moving Average - MA

What Does Moving Average - MA Mean?

An indicator frequently used in technical analysis showing the average value of a security's price over a set period. Moving averages are generally used to measure momentum and define areas of possible support and resistance.

Investopedia explains Moving Average - MA

Moving averages are used to emphasize the direction of a trend and to smooth out price and volume fluctuations, or "noise", that can confuse interpretation. Typically, upward momentum is confirmed when a short-term average (e.g.15-day) crosses above a longer-term average (e.g. 50-day). Downward momentum is confirmed when a short-term average crosses below a long-term average.

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