It is make or break time, we have 200 EMA acting as resistance while 20 is looking to crossover 50. Market is moving one way or the other. I would be playing a breakout lower, however I would not be dogmatic if the tape tells me I am wrong. My feeling with the MACD topping on the daily chart and the divergence (marked with red lines below) on the 4 hour chart, we should see the market lower, rejecting the 20/50 crossover.
Looks like we are off to the races to test the old highs. I want to see a close on Monday above the 200 EMA on the daily before I throw in the towel. Today looked like the market was going to close near but below and short covering moved us over the line.
ReplyDeleteGet net long if you haven't done so already. I am wary of this rally but with CAT results, China PMI and market closing above 200 EMA no need to press shorts.
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