The next point of interest here is the downward-sloping 50 day moving average. It’s not the average so much as the slope of the moving average that is troubling. It is literally heading straight down. Not only is 1177 trouble, but I wouldn’t be surprised if after a breakout, the market comes back and consolidates a bit. Remember because of the downward slope, the market is still guilty ’til proven innocent.
Not to get too far ahead of ourselves, but if the market does indeed break above the 50-day, I would be surprised if this average didn’t come into play again a few times in the next few weeks. By definition, the 50 day moving average is a lagging indicator. There is data in the average that goes back a few months: 50 days ago, July 29th, the S&P500 was almost 12% higher. Once the data points pre-Aug 8th, get out of the way, you should see an upward slope. That is still about a week and a half from now.
The other major indexes are all in pretty much the same boat. This should be another interesting week.
Go get ’em!