Thursday, November 17, 2011

Morning Market

For the last few weeks, the market has been moving sideways.  Yesterday, we saw a change in several of the major equity ETFs.

On high volume, the SPYs printed a strong downward bar that moved through the 200 and 50 day EMA.

We see the move in good detail on the 10 day, 5-minute chart.  Prices moved through important support a little before lunch yesterday and remained there for the remainder of the trading session.

In addition, we saw the QQQs move through the 50 day EMA, also printing a strong bar on decent volume.  That makes two equity indexes that made significant downside moves yesterday.

Ideally, to confirm this move lower, we'd like to see prices advance into the EMAs on declining volume and then sell off once they hit important resistance levels (like the EMA).

In contrast, we have the IEFs' which advanced yesterday, but with not quite enough momentum to make it through important technical resistance -- yet.  With the weaker CPI print this week, real yields actually increased overall, meaning we have move upside room in the Treasury markets.