Markets recorded a wild reversal Wednesday, with both the Nasdaq and S&P 500 recording bearish outside days in the process. This last happened for both the aforementioned benchmarks on 2/25 this year. They went no lower from there, unbelievably, most likely in part that they were greeted with almost precise 50 day SMA support. This time they are well extended from those lines. One of the reasons I decided to enter 100% cash yesterday at the close. There were a multitude of reasons why I was seeing some potential pitfalls, and among them were the extended nature of these indicies from their 50 day SMAs. Tuesdays close for instance, the Nasdaq was about 200 handles from its 50 day. It also was having issues which is not uncommon at all of indexes pausing at big round numbers. That was 3500 on the Nasdaq. Now I am not calling for Armageddon but the Nasdaq and S&P 500 could retest their 50 day SMAs and still be considered in an uptrend.
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