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Stocks End Near Lows; After Strong Open

The market remains in a correction, which emphasizes the importance of raising cash and adopting a strong defensive stance until a new follow-through day emerges. For the past several weeks, this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. In addition, their 50 DMA lines may continue to act as stubborn resistance. It was also recently noted that the NYSE Composite and the benchmark S&P 500’s 50 DMA lines sliced below their respective 200 DMA lines, an event known by market technicians as a “death cross” which usually has bearish implications. Trade accordingly.

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Adam Sarhan July 6, 2010

Tough Week On Wall Street

Some might say that Thursday was Day 1 of a new rally attempt due to the fact that the major averages closed in the upper half of their intra-day ranges, recovering from steep losses in the first half of the session. That still does not change the fact that the market is in a correction which emphasizes the importance of raising cash and adopting a strong defensive stance until a new follow-through day emerges. For the past several weeks, this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. Their 50 DMA line may continue to act as stubborn resistance. It was also recently noted that a series of capital markets (Crude oil, Copper, NYSE Composite Index, among others) 50 DMA line already sliced below the 200 DMA line, an event known by market technicians as a “death cross” which usually has bearish implications. On Friday, the benchmark S&P 500 Index’s 50 DMA line offically undercut its longer term 200 DMA line which means the benchmark index can be added to the list. Trade accordingly.

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Adam Sarhan July 2, 2010

Stocks End Near Highs; Economic Data Weak

Some might say that Thursday marked day 1 of a new rally attempt due to the fact that the major averages closed in the upper half of their intraday ranges, recovering from steep losses in the first half of the session. That still does not change the fact that the market is in a correction which emphasizes the importance of raising cash and adopting a strong defensive stance until a new follow-through day emerges. For the past several weeks, this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. Their 50 DMA line may continue to act as stubborn resistance. It was also recently noted that the NYSE Composite Index’s 50 DMA line already sliced below the 200 DMA line, an event known by market technicians as a “death cross” which usually has bearish implications. Trade accordingly.

Read More »
Adam Sarhan July 1, 2010

Stocks Retest Support As The Dollar Advances

Tuesday’s steep sell off effectively ended the latest rally attempt and sent all the major average back down towards their recent lows. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. Looking forward, the 50 DMA line may act as stubborn resistance and this month’s lows should act as support. It is also worrisome to see the 50 DMA line already slice below the 200 DMA line on the NYSE. This event is known by market technicians as a death cross and usually has bearish implications. Trade accordingly.

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Adam Sarhan June 29, 2010

Stocks Drift Lower After Blasé G-20 Meeting

Technically, the fact that the Dow Jones Industrial Average, S&P 500, Nasdaq Composite and NYSE Composite all closed below their respective 200-day moving average (DMA) lines last week which bodes poorly for the current rally. Additionally, this unanimously ominous action suggests the market may retest its recent lows. Looking forward, the 50 DMA line may act as stubborn resistance and this month’s lows should act as support. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. It is also worrisome to see the 50 DMA line already slice below the 200 DMA line on the NYSE. This event is known by market technicians as a death cross and usually has bearish implications. Trade accordingly.

Read More »
Adam Sarhan June 28, 2010

Week In Review: Stocks Negatively Reverse And Close Below 200 DMA lines

Technically, the fact that the Dow Jones Industrial Average, S&P 500, Nasdaq composite, and Russell 2000 index all closed below their respective 200-day moving average (DMA) lines this week bodes poorly for the last rally attempt. Additionally, this unanimously ominous action suggests the market may retest its recent lows. Looking forward, the 50 DMA line may act as stubborn resistance and this month’s lows should act as support. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. This week’s sell-off simply confirms that view. Trade accordingly.

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Adam Sarhan June 25, 2010

Stocks Get Smacked On Lackluster Economic Data

Technically, the fact that both the Dow Jones Industrial Average and the S&P 500 Index continue falling after closing below their respective 200-day moving average (DMA) lines earlier this week suggests the market may retest its recent lows. Looking forward, the 50 DMA line may act as stubborn resistance and this month’s lows should act as support. Since the June 15, 2010 follow-through day (FTD), this column has steadily noted the importance of remaining very selective and disciplined because all of the major averages are still trading below their downward sloping 50-day moving average (DMA) lines. This week’s sell-off simply confirms that view. Trade accordingly.

Read More »
Adam Sarhan June 24, 2010

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