Friday, March 20, 2009
The rally that started at the end of last year is now over; prices have convincingly moved through the upward sloping trend line that started in December of last year. Prices have also moved through all the SMAs which will pull them lower. Additionally, the 10 day SMA has moved through the 20 day SMA and the 10 and 20 day SMA are both moving lower. Finally, the MACD shows momentum has moved downward and the RSI tells us prices are weakening.
The long debate about whether the market was forming a double top is now over. Thanks to the Fed saying it will basically print tons of dollars prices have dropped.