Friday, June 17, 2011

S&P 500 Touches and Bounces Off 200 DMA

It was a text-book perfect technical bounce; the market (S&P 500) tagged its 200 day moving average on Thursday and bounced perfectly.

Futures are pointing to a big up opening for Friday morning as well.  This word of caution however; the market rarely bottoms right at the 200 day moving average. The bottoming process is generally a messy process and rarely a neat and highly predictable one day event. We remain cautious and more inclined to sell into rallies rather than be buyers on bounces at this point.

(Click on chart for easier viewing)


 
 
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