The bears continued to grab the upper hand yesterday as the major indices broke down through important technical levels on higher volume. Both the Dow and S&P 500 broke their 50-day moving averages and the uptrends they’ve been in since October. The Nasdaq just broke the neckline of a little head & shoulders pattern and looks like it’s headed to its 200-day moving average. I don’t particularly like to trade when the indices are between their 50 and 200-day moving averages b/c the picture is so mixed. I’m going to wait for the current oversold condition to get worked off before initiating any swing trades. I want to see how strong of a bounce we get, especially in the face of any earnings warnings that may be released over the next week or two.
