Moving Averages and What They Tell Us About The Market

THE WEEK

Another week of chaos and uncertainty tell this past week’s story.  It was the start of the heavy earnings announcements with a ponderance of tech stocks in the mix.  Compare the S&P and NASDAQ charts.

Note:  Both had a similar chart pattern and volume pattern.  The main difference I see is the moving averages for the SPY are more sideways with the 50-day on top with the 100 and 200 day moving averages spaced life the tines of a fork.  On the other hand, NASDAQ has the 50-day moving up faster than the 100 and 200 day and we just saw the 100-day cross above the 200-day indicating NASDAQ and the Tech stocks are getting stronger.

LOOKING AHEAD

Normally I would be excited to trade the stock market as it now looks.  BUT, and this is a big but, there are a lot of economic announcements scheduled this coming week including the FOMC press conference.  For the past year these announcements have been the cause of huge volatility and violent price swings.  Even though I seen the market sentiment in better shape (less fear), I will still tread cautiously. 

HOW AM I DOING?

Great!  We have one week of DATA classes under our belt.  I started the week with $25,000 in my public trading account and have a current balance of $25,789.50, a 3.1% gain for the week.  

I consider that good as I have just entered 4 new diagonal credit spreads (Money Press trades) and the first week of this multi-week trade usually shows a loss.

Loving teaching DEEP DIVES into subjects you have suggested. This week’s dive is on sector rotations

See you on Thursday’s webinar!