Posted: Feb 22, 2010 5:00
The Shanghai Composite index stabilized overnight at its 200-day MA for the 3rd time in over 20 days and S&P500 closed right above its 200-DMA on Monday. The usually inversely related EURUSD broke its June trendline resistance, regaining its 100-DMA but failed to climb above its 55-DMA. Buy-the-dip complacency in equities may suggest the S&P500 will bounce off the key 200-DMA as it has done on July 7, 8, 9 and 10.
Moving into the weekly horizon, however, the divergence between the Dow Jones Industrials Average and the S&P500 becomes interesting, with the former breaking below its 55-WMA for the 1st time since the infamous week of mid October 2014, when the Fed officially ended QE3. And so in order for S&P500 to reach its 55-WMA, it would have to lose another 20-pts or 0.98% from Monday's close.