Tuesday, December 9, 2008
Lateral trade ahead of the automotive bailout outcome. Cumulative tick is positive, but nothing like yesterday (see second sub-pane), and the AD line is trailing off. The five-day moving average is upward sloping, but with a second day of short-term RSI's found in the 80's, the market could stand to blow off some steam with a mild-pullback soon. Also note that the 50-day moving average is just above at SPY $92.70. Nonetheless, so far today the daily pivot has held up as support in another encouraging day for the bulls.
Regarding RSI's, check out this terrific summary article posted by MarketSci, "Trading with RSI". RSIs are published every weekend here across more than a dozen sector and style securities within the Weekly ETF posts.
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Close - Bulls can feel good about this pull-back as yet. As long as the slope of the decline/ pace doesn't steepen and the news cycle doesn't appreciably worsen (if that is possible), we should see support near the rising 5-Day Moving Average SPY $87.85.
My former Governor is quite a piece of work. I'd say unbelievable, except that I lived in Illinois for eight years. Now he can have tea with his predecessor on a daily basis. Daily, rhymes with Daley -- how about that?
Post Close - Is the retracement over? Maybe, but I don't think so; keep a close eye on the 5-DMA, as discussed above.
Never Investment Advice
Posted at 12:49 PM