Three Failed Attempts to Regain 200 Day Moving Average, Buyers Beware!

By: Jeb Handwerger | Tue, Jun 15, 2010
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In baseball if you swing and miss three times then you are out. On a chart if you see three failed attempts to break resistance...get out or short.

Each time the SP500 tries to regain the 200 day moving average it fails and it is immediately hit with selling. Sellers are in control and the market is still in correction mode.

SPY Daily Chart

Today Moody's downgraded Greece's debt which caused the market to give back early leads. The chart shows a picture of a move up to the 200 day on low volume. This means there is very little buying going on. In order for me to gain confidence in the markets I need to see a break through major resistance levels with conviction and that moment is not apparent yet.

Quite contrary three failed attempts to regain major support has failed. This causes me great concern because in a bull market the 200 day acts as support. In this case it is acting as resistance, which is typical of bear markets..buyers beware!

 


 

Jeb Handwerger

Author: Jeb Handwerger

Jeb Handwerger
http://goldstocktrades.com

Jeb Handwerger

I started reading charts at eleven years old. One day my father, a market trader and technician found his library of books on technical analysis mysteriously disappearing. He later found the textbooks under my bed. For many years day and night I studied technical analysis and charting, working and learning from my father who has over 50 years of trading experience. Technical analysis is my passion and love.

In 2001, I started noticing the junior mining stocks and gold as having a tremendous upside. For the past 9 years I have researched many juniors and have identified the major winners using technical analysis and finding top management.

I earned a Bachelors Degree in Mathematics and a Masters Degree. I learned most of my technical analysis from the school of hard knocks, managing real money for myself and for my family.

Constantly perfecting my craft, I have traded for two decades of success in many different markets. I have been asked to post ideas to some of my students who have taken my course in charting and technical analysis. I have made an excellent living trading stocks for myself.

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