The DOW Holds Up @ The 50ema Support. Will The Market Rally or Tank?
Nov 3, 2009 Technical Analysis
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The market has been in a steady and chaotic free fall the past couple weeks and we are making our way through earnings season. Theirs no doubt that the market has become more nervous here around this 10k area and the confidence in buying stocks has come to a hault. Technically we are at a major support area here with the market holding up @ the 50ema support as well as the ascending wedge support. Slow Stochastics are also in oversold territory so if the market were to rally then this is the area where we should expect to see some bullish moves in the market..
Yet this is also a place where we need to be cautious. Im still very cash heavy in my portfolio with actually only 2 stocks that i have smaller positions in as im not to confident in going either long or short as the market volatility makes it very easy to get stopped out of your positions currently and i’d rather just sideline it instead of trying to force trades just because people expect me to make a trade. I only trade the setups I feel comfortable with as its the half ass trades that you make are the ones that end up eating up your profitable trades.
At support here its also very easy for some to be picking up long positions yet get stopped out very quickly if the bears to decide to spice things up and breakdown support levels which in turn could cause panic selling. Its always a tough call to bet right at a support level. My confidence in the market rally in the very near short term isn’t too high. I’ll just be sitting and waiting patiently for the right set ups to come my way.
Technical Analysis:
