Thoughts on todays action.

Just another wild day in the market.  Today was important because the Nasdaq Futures tested their 150 day smooth moving average and failed to hold above it.  I talked about this today when I was doing my weekly Q&A on Ustream.  During this recent break in the market we saw selling escalate a number of times due to important technical breakdowns (amongst other reasons).  The Nasdaq breaking below their 150 day smooth moving average was one of them.

If the Nasdaq cannot get back above an important moving average then that is bearish action for them and the rest of the market.  When the leader (right now the Nasdaq is the leader of rallies)  fails to get above important technical areas; that causes longs to cover.  That is what I believe you saw at the end of the day today.

Although we had massive gains in the market today the last hour of trading was bearish action.  We have now tried to get back above the 150 day smooth moving average four times and failed.  What tomorrow brings I am not sure but I will definitely be watching that moving average in the Nasdaq.  Have a good night.

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