Moving averages are great indicators for what direction the market may be heading. For short term trends and trading you want to watch the short term averages. The SP-500 and DJ-30 both alerted me today to be very careful the market is in take profit mode. Trades will still be made but with very good Money Managing, and being extra careful on your entries and exits.
Could the market sky rocket? I guess anything is possible but in reality with a QE3 bubbles, mixed economic data and low GDP I don't think people are going to be paying extreme prices for stocks. I believe we may see a trading range for some time till something happens to send us either up or down. Remember we are already up 17% for the year with no real good reason. See the charts below as to why I am watching for a downturn in the market.
Both Charts show the 3SMA crossing under the 5SMA and what happened the last two times this happened at highs in the market. There are other indicators I watch which have given me the same alert.
DJ-30
SP-500
Follow Anthony Calhoun at https://twitter.com/AnthonyWCalhoun
No comments:
Post a Comment