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.
Each month, Stan Harley publishes The Harley Market Letter, a newsletter that provides advanced technical analysis of stocks, bonds, and precious metals. This is the latest update to the Harley Market Letter for December. Want to learn more from acclaimed market analyst Stan Harley? Visit his site and subscribe to the full Harley Market Letter.