If you are a chartist and if you love moving averages on those charts, you better pay attention to the stock charts today. In our Erlanger daily chart analysis the thesis right now is to only buy if you see some chart support. Whether or not that support holds up or not is something that will be up for debate in the coming hours and days. Still, the 50-day and 200-day moving averages are starting to come into play on the DJIA (NYSEMKT: DIA) and in the S&P 500 SPDR (NYSEMKT: SPY). We are even seeing this in the NASDAQ 100 via the PowerShares QQQ Trust (NASDAQ: QQQ).
The S&P 500 has been holding up above the 50-day average but that is either being tested or is going to change here very soon. At $133.27, the 50-day moving average is $133.15. The 200-day moving average is down at $130.60 today.
On the DJIA, the DIAMONDS are just now trading under the key 50-day moving average. At $125.28, that key moving average is $125.56.
The the PowerShares QQQ Trust (NASDAQ: QQQ) is down at $62.76 today and the 50-day moving average is $62.86. Now that the 50-day moving average has broken, the 200-day moving average is down at $61.25.
If you notice the trends here, the more important 200-day moving averages are all very close to being hit now.
We can tell you in more detail what the cause is, but you already know it: Greece, PIIGS, Europe, China, weakness in BRIC nations, a strong dollar, and on and on. Soon it will be the coming fiscal cliff… No wonder no one wants to read news about the stock market these days.
JON C. OGG
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