Last night when I mentioned looking for a bounce around the 50-day moving averages I had no idea we’d get there this quick. It’s clear that technical traders went to work today, once again buying at that popular moving average. This is the third time since late September that the indices have found support at their 50 DMAs.
It’s almost getting too predictable. But before the bulls start the victory dance let’s see if they can create some follow through to the upside.
Once again I’ve got a list of long candidates for tomorrow, most of which made hammers and/or successfully tested their 20 or 50 DMAs. I like the risk/reward on this group so I’ll be buying if they take out today’s highs.
Seems like each magical bounce is weaker than the last one. This latest “bounce” is perhaps the weakest of all unless we get some rapid turn later this week. Adds to the heavy feeling right now in the market…