I mentioned earlier this week how strong the SP500 had been this year in that it had not even visited below its 50 period exponential moving average on the 30 minute chart, aside from 2 moments (the 8th and the 15th). And those two were very brief intraday visits. Yesterday was the first CLOSE below that level signifying some caution needed. This morning the index has wavered below and above it (purple line below), falling as low as the 100 EMA (blue line) and thus far bouncing perfectly off of it. At this time it is making another run back at that 50 EMA. Here is a chart of the past week – for whatever reason to take a closer look at any chart you have to click on it twice, once on this page and then on the next just fyi.
It is also fair to note that while small caps have lagged much of this week, they are back as the leading index today.
If you are a technician who believes in the inverse head and shoulders pattern that started in mid November, it still measures to mid 1510s to mid 1520s (depending on how you measure it), which has not yet been reached. So if you are in that camp there would be one more exhaustion rally up before it all peters out. While strange to do almost a 'straight shot' there post Jan 1 with no rest, we've seen a lot of strange things in the FOMC is everything era post 2008.
Any securities mentioned on this page are not held by the author in his personal portfolio.