swingtrader930 (38.80)

Market Showing Another Sell Signal

July 06, 2009 – Comments (1) | RELATED TICKERS: SIJ , DOG , SH

Today’s open, high, low and close for the S&P were all below the 50-day exponential moving average.  That’s definitely not a good sign for tomorrow’s open. 

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If you look at the 50-day EMA’s rise it’s starting to level off.   Normally when the 50-day average gets close to the 200-day traders and investors alike start looking for a crossing.  In this particular situation we would be looking for the 50-day to cross above the 200-day.  From all appearances it doesn’t look like this is going to happen.  About 3 weeks ago the market attempted to punch through the 200-day after trying for 10 consecutive days.  This is not a good way to start off earnings season.  On Wednesday the first bellwether stock, Alcoa, is set to announce.  Alcoa is expected to show a second quarter loss.  This could initiate another downward move.   If the 50-day EMA rolls over we could go a long way down.