50 Moving Averages Testing Support
Since topping-out on December 5, the popular averages have begun to cascade down in pristine fashion. The DJIA, the DJTA, the S&P 500, the NYA, the RUT, the NAZ Comp – no component of the Big Six has been immune. This has been a broad-based decline and is indicative of the major top I believe has been seen in the rear-view mirror. I find it noteworthy that the New York Comp – the NYA – has been the weakest among the major indices thus indicating substantial weakness among all stocks that comprise the New York Stock Exchange. The 50 day moving averages – which typically provide support, even temporary support – have all been breached to the downside. It’s conceivable we may see a snap-back to test those 50 day moving averages. Should that happen, this market might tread water – violently sideways – until Christmas before the next heave-ho to the downside breaks the October lows. FOMC meeting tomorrow.
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