Another Volatile Session On Wall St As Investors Digest Awful Housing Data & Latest Fed Meeting

ByAdam Sarhan

Technically, the fact that both the Dow Jones Industrial Average and the S&P 500 Index closed below their respective 200-day moving average (DMA) lines suggests the market may retest its recent lows. Looking forward, the 50 DMA line should now act as 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

Stocks Close Below 200 DMA Line

ByAdam Sarhan

Technically, the fact that both the Dow Jones Industrial Average and the S&P 500 Index closed below their respective 200-day moving average (DMA) lines suggests the market may retest its recent lows. Looking forward, the 50 DMA line should now act as resistance and this month’s lows should act as support. Since last Tuesday’s 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.

US Stocks Negatively Reverse After China’s Currency Becomes More “Flexible”

ByAdam Sarhan

It is also important to note that it was encouraging to also see the Dow Jones Industrial Average and the benchmark S&P 500 Index rally above their respective 200-day moving average (DMA) lines last week. The 200 DMA line should now act as support as this market continues advancing, while any reversal below that key technical level would be a worrisome sign.

Remember to remain very selective because all of the major averages are still trading below their downward sloping 50 DMA lines (which is the next area of resistance). It is also important to note that approximately 75% of FTDs lead to new sustained rallies, while 25% fail. In addition, every major rally in market history has begun with a FTD, but not every FTD leads to a new rally. Trade accordingly.

New Rally Confirmed; Stocks Close Above 200 DMA Line

ByAdam Sarhan

Friday, June 18, 2010 Stock Market Commentary: Stocks ended higher this week, confirmed their latest rally attempt, and the benchmark S&P 500 index and the Dow Jones Industrial Average both closed above their respective 200 DMA lines which is an encouraging sign. Volume totals were reported higher on both major exchanges due to Friday’s quadruple witching day. Advancers led decliners by…