"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 23 hours The $85B Merger That Could Change The Media Forever
  • 24 hours Why Are Governments Creating Their Own Cryptocurrencies?
  • 1 day How Debt Cycles Impact Gold
  • 1 day Investors Up the Ante In $1.5B Uber Loan Deal
  • 1 day Are Gold Miners Poised For A Breakout?
  • 1 day Is The "Crypto Winter“ Over?
  • 1 day China Says It Doesn’t Fear Trade War
  • 2 days Twitter CEO: The World Will Have A Single Currency
  • 2 days Asian Currency Correction Could Signal Looming Crisis
  • 2 days Best Buy Drops Telecom Giant Over National Security Threat
  • 2 days The Pros And Cons Of The Federal Interest Rate Hike
  • 2 days Good News For Gold Bulls Despite Interest Rate Hike
  • 2 days Trump Hits China With $50 Billion In Tariffs
  • 2 days Russian Gold Reserves Hit Record High Amid Rising Tensions With West
  • 2 days Stocks Pull Back Following Interest Rate Hike
  • 3 days Will Regulatory Rollbacks Make Banks 'Too Big To Fail?'
  • 3 days Elon Musk’s $2.6 Billion Tesla Challenge
  • 3 days Tech Giants Could Be First Victims Of U.S. Trade War
  • 3 days Dow Gains Despite Fed’s Rate Hike
  • 3 days The Biggest Threat To Chinese Oil Futures
Trump's Trade War Nears Boiling Point

Trump's Trade War Nears Boiling Point

Trump’s trade war appears to…

Investors Up the Ante In $1.5B Uber Loan Deal

Investors Up the Ante In $1.5B Uber Loan Deal

Uber may be facing significant…

Markets Stall at the 50 day MA

Yesterday, I wrote we could see a market consolidation if IBM stalled at resistance, which it did today. I also wrote the 50 day MA was a place for that consolidation to begin.

What I failed to do yesterday was build out what the bearish view is technically in a more complete manner. The DOW and SP500 both failed today at the 50 day MA. Both reflect a daily MACD that is trying to turn higher, but it looks a lot like the bottom in February.

Dow Jones Industrial Average

The MACD tried to turn up but failed and rolled over in early February. That could easily take place again, and soon. The technically bearish items at hand include that, the volume on this week's bounce has been nothing short of sad, and the weekly MACDs are trying to roll over from over bought territory.

In addition, if we take a look at the broader market (NYSE) we see a market that has lagged a lot, in relation to its 50 day MA. That creates a divergence worth watching, it's not exactly bullish.

NYSE Composite Index

I also failed to note that in the long run I'm immensely bearish on the markets and the economy, as I have often written about the coming deflationary cycle. I don't want anyone to think I'm a bull in this world, which would take a dramatic change on multiple economic fronts, and I don't see that anywhere. It's also one of the reasons I've suggested taking profits, and chips off the table when the market had made the last two peaks. When this market does roll in a more concerning manner, you be able to buy your stock market investments back at prices well below these levels.

However, those longer term views can be different to the present for trading. Yesterday, the markets were at their 50 day MAs, and there was not a low risk set up to trade long or short, at least not for me at that juncture. I want to see more price and form, which should happen soon.

We have not gone long for this bounce, and in fact we're currently holding a couple of shorts. Nothing major, but a couple things that reflect the kind of technical's I like and we're willing to hold.

Well, I'm glad I got this out; it was bothering me all last night. I really wanted to clear up my long term view from the shorter term trading set ups.

Hope all is well.


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter