No, not the battle of Baghdad, the battle for the S&P 500′s 200 day moving average (DMA). The bulls were able to push above the line this morning, but the bears did what they do so well — smacked the bulls down, and we closed below the line. So yesterday’s Iraq war enthusiasm waned today. Me thinks the 200 DMA will hold until victory in Iraq is certain. Until then, I think the S&P will continue to vacillate between its 50 and 200 DMAs. The NASDAQ chart looks much better. It’s above both it’s 50 and 200 DMAs, and it jumped out of the down-trend channel it’s been in since December. However, there are lots of sellers at 1400 up to 1421. The 1421 level marks the top of the gap left on March 24th vicious gap down. I’m also seeing a good number of bearish candlesticks (shooting stars, bearish engulfings, and dark cloud covers) in my scans tonight. I expect tomorrow may be a flat day though, as people position for the weekend. Shorts will want to be out in case peace breaks out over the weekend.
