The week ahead 9/12 - 9/16

Last week's battle was won by the bears. The last thing that you want to see before you go into 9/11 weekend is a selloff. At this point I am not sure if the selloff was just weak longs covering before the weekend or if we are now heading lower to test the lows of the year.

All of the charts that I posted are showing bearish action. Even though the recent action is bearish I still think that the market has a little bit of proving to do before I am fully on board with the bears.

The Dow Industrials and Transports have already proven to me that they want to go lower. Ever since the bearish Dow Theory confirmation on August 4th both markets have been sustaining trade below that area. This is extremely bearish action and all of the pressure is on the longs in those two markets.

The Nasdaq is the strongest market and they are giving hope to all of the bulls out there. As strong as the Nasdaq is they have also had their problems. They cannot seem to hold on to positive territory for the year and their 150 day smooth moving average. If the Nasdaq cannot sustain trade above these two areas then I think that the bears have full control of this trade. If the Nasdaq can hold above both their 150 day smooth moving average and stay in positive territory for the year then I think that we will see a choppy trade that favors a rally.

Last but not least we have the S&P. The S&P is usually the best indicator of direction but right now they are in limbo. The S&P cash is currently holding its daily uptrend (not by much but still holding) and currently below all of their major moving averages. If they can continue to hold their uptrend and then sustain trade above their measly 10 and 20 day moving averages then I think you may see some buyers come in and take us higher. If they cannot hold their uptrend then I think that lows of the year are in jeopardy (1101.54).

I expect somewhat of a wild week ahead after the action we saw on Friday. I think that this week may tell us a lot about the next few months. Have a great week of trading.

Moving Averages; Black (10 day), Blue (20 day), Green (50 day), Pink (200 day) Purple (150 day smooth avg.).  Horizontal Lines; Blue (High of the year), Red (Low of the year), Green (Unchanged for the year. 

Dow Industrials

Transports

E-mini Nasdaq

S&P Cash

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