The S&P500 could not hold the 50-day today, setting, yet again, a nice bull trap to hang the MoMo crowd. Seeing a lot more traps, both bull and bear, these days. It reflects the dominance of machine trading. They are above human emotion. Smug, don’t you think?
We wrote in our recent Week In Review post,
- S&P500 generated a very rare back-to-back bear trap (broke and closed above 200-day) days on Thursday and Friday. It has occured only 0.76% of the trading days since 1962
What a market. Back-to-back bear traps followed by today’s bull trap. Three traps in a row.......
...............What The Stock Bulls Need Now
It is imperative the S&P bulls: 1) hold the 20-day moving average at 2,663.04; 2) bust and close above the 50-day at 2,679.56. Note, the 50-day now has a negative (downward) slope, which, on its own, is bearish, and 3) take out and close above the recent high at 2,717.49
Relentless Pounding Of The 200-day Moving Average
A lower swing high here, that is below 2.717, would almost seal the fate the bears will take out the 200-day. The bears have been relentlessly pounding during the 200-day during this correction.
Some think what doesn’t kill you makes you stronger. Personal character, yes.
Technical support levels, we don’t think so. Eventually, the front lines will crack, even if it the robots defending them.