I am even hearing that fundamental managers who normally shun charts and technical analysis as a pagan religion are starting to track such alien indicators as Bollinger bands, relative strength indicators, and stochastics. The 200 day average presents such formidable upside resistance that it will take spectacularly good news to close substantially above it on big volume. A little bit of “kiss and make up” in Europe just isn’t going to cut it, especially when they continue to bad mouth each other among their close friends in private.
Since I am such an inveterate seeker of cross market correlations, I always like to refer to the Volatility Index before taking decisive action on a trade. And guess what? Just as stocks are bumping up against resistance, the (VIX) is bouncing along support at its 200 day moving average. This further reinforces my belief that the indexes are ripe to give back a chunk of their recent gains.
Watch your news service headlines. This contest will ultimately be determined by what does, or does not happen in Europe. And once again, thank you Standard and Poor’s for another belated downgrade of European debt!
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Post Written By: Gold And Oil Guy
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