Market Analysis

MA Rejects

In Weekend Charts I talked about the 21MA rejection we witnessed on $SPX on Friday. Looking at today’s market action we see a divergent market with $NDX green and the rest of the market struggling as internals are decidedly negative.

A quick glance at major index charts shows that the $SPX is not the only index to struggle with key moving averages (MAs). As long as these MA’s are not recaptured on a closing basis this recent bounce off of the 200MA remains subject to risk lower.

To recap: $SPX bounced off of the 200MA and then met rejection at the 21MA:

which also matched the rising trend line:

If you think the rejection was a coincidence you may want to note that $SPX was not alone finding key resistance at key moving averages.

Joining $SPX as MA rejects are:

$NYSE at the 50MA (note also the precise bounce off of the 250MA):

$DJIA 20MA:

$RUT at the 21MA:

These initial rejections are no surprise as MAs can be key market pivots and hence offered a tradable edge. These MA rejects currently represent a dividing line in the sand. Bulls need to get above them on a closing basis or risk a sizable retrace or potentially new lows.

For the latest public analysis please visit NorthmanTrader. For our market products please visit Services.


All content is provided as information only and should not be taken as investment or trading advice. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. For further details please refer to the disclaimer.

Advertisements

Categories: Market Analysis

Tagged as: , , ,

Comment:

This site uses Akismet to reduce spam. Learn how your comment data is processed.