MARKET WRAP UP 06/03/10
With the S&P 500 edging up 0.41% to close at 1102, this market is at a clear and undeniable crossroads. On the one hand, we have all of the makings of a bearish wedge, or continuation pattern, since finding a temporary low at 1040. The updated and annotated daily chart of the S&P 500, seen below, should illustrate this notion.
Not only have we struggled to recapture the 200 day moving average, but volume has been steadily declining throughout our attempts to do so. This shows that the big institutions do not have much conviction in accumulating stocks, despite the most recent selloff. On the other hand, the bulls can argue that the hammer from May 25th is still valid, and that some key stocks and indices are holding up well.
Moreover, the Nasdaq has already recaptured several important moving averages, as seen in the annotated daily chart below.
In sum, there are strong arguments in favor of both bulls and bears at this point. With that said, I am starting to see some enticing setups on the long side. I will post some trading ideas later this evening, but please keep in mind that I will be waiting for confirmation to the upside before acting on them.
Be back with more charts in a bit…Twitter