Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
On Thursday the 5th the SPY (S&P 500 ETF) had a low of 139.26. Markets were closed on Friday for Good Friday as the monthly jobs data was released. Those weaker than expected results led to a gap down the following Monday. That gap has now been ‘filled’ to the upside, as today’s intraday high is 139.36.
Another thing to note – 5 of the past 6 sessions have seen the S&P 500 cross above or below the 50 day moving average, which is a key level. This has created a lot of havoc. Once the final data is in tonight I’ll review to see if that trend line from the October 2011 lows to the April lows has been recaptured but it has to be very close at these levels. We are slightly above the white noise range I mentioned – of course I didn’t expect the entire 20 handles to be traveled in 1 session.
Other than some oversold conditions and the need for Apple to bounce after 5 days of selling I don’t see the fundamental reason for such a bounce (economic data was “meh” today), but as Bob Pisani said on CNBC today – the market is dominated by short term momentum traders.
I still can’t believe we were down over 5 handles in the futures market overnight! The past 2 days have been some serious whipsaw action. A close near the lows, on a break of a key (50 day) moving average leads to… a rip your face off rally up. Hmm..
So now the question is does the S&P 500 clear 1400 and get back to testing yearly highs, or is this the top end of the bear flag I mentioned this morning? Good question.
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