The much anticipates break of the 20dma came right off the bat this morning, and, as expected, we headed for a test of the 50dma. What I didn't expect was to get there in one day. I now have to start putting up both simple and exponential averages, to see which one, if any, is going to provide support. So far the exponential, which should be higher, has held, and today's low was exactly at the bottom of the trading range I have had the SPX in for quite some time. I would be a little surprised if we didn't boune tomorrow, and if we do get one, it should be watched carefully to see how strong it is. Volume was quite high, which would tack on another distrbution day, but that is if IBD does not have us in "market in correction" mode.
The Nasdaq is also holding the 50dema so far, but the price relative is weakening. The treading range here is a little confusing to me, so I have approximate support and resistance levels, and I would not count on them down to the penny.
The Dow industrials have probably the most straight forward chart, with a clean test of support today. Despite a big fat red candle, the price relative line is rising, which is not good.
The Russell 2000 gapped through the 20dema, which it finish above yesterday in a show of strength. It is still well above support here, and price relative has turned down a bit but holding up well. Volume on IWM was high, but I take ETF volume with a grain of salt. If we ge a bounce tomorrow we will see how strongly this participates.
The market downturn is turning into a correction, this time the Euro being the culprit. Commodities, which were goin parabolic last week, are getting smacked badly this week, and even the banks got thrashed today. Bonds were selling off like crazy this morning, but suddenly, and inexplicably, reversed and closed positive (TNX negative). It seems the fear trade is making a comeback.
I will have the new highs update shortly.
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