Posted by 4 October 2005

Back Under the 50s

Well the indices rolled over pretty hard today and are now back under their 50-day moving averages. Nobody could have ever seen this coming, right? ;-)

The Dow looks especially precarious as it’s now under both its 50 and 200-day moving averages. There will probably be a death cross in a few days as well…

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Comments

  1. Posted by Mike Greenwell on October 4, 2005 at 11:36 pm

    Hey Mike great call…do you worth WITH DaytradeTeam at all? They also put on a pretty perfect short of the Q’s (this morning) for a swing trade so I was just wondering. Great call.

    Mike

    p.s. Is there more downside to go?

  2. Posted by Michael on October 5, 2005 at 7:53 am

    Mike,

    Unfortunately I didn’t short anything yesterday. But at least I recognized that things were extended and the Naz was near/at resistance and stood aside. No, I don’t work with daytradeteam.

    I don’t know if there’s more downside but if I was swing trading the QQQQs/Nasdaq I’d feel pretty confortable staying short until stochastic reached oversold. Whether price drops or not I can’t say — it could reach oversold by going sideways…

  3. Posted by Englishman Trader on October 5, 2005 at 10:05 am

    Mike, can you explain what you mean by a death cross ?

  4. Posted by Michael on October 5, 2005 at 10:24 am

    It’s when a shorter-term MA crosses under a longer-term MA. Some people consider that to be a very bearish event but I actually don’t put much weight on them as a signal because moving average signals lag so much