Strong Reversal Off of 200 Day

Weekly Continuous

What can you say about a market that test the 200 day SMA and the 40 week SMA all on the same day and then promptly reverses lower to close the week with a lower low breaking the recent trend activity. I can tell you one thing you can’t say is bullish. That being said, each progressive day the declines were on lighter volume — not exactly the bearish indication that bearish folks would want to witness. Through Tuesday (the latest CFTC report on Friday) showed additional speculative fund covering positions and open interest was down for the week (very slightly). I had seen the press that funds had come in on the declines, which, from the data is not supportive of that type of claim.

Monthly Continuous

From the longer term perspective — the next few weeks will be important to witness and trade. Still in the old range (in spite of the expansion last week) and the market seems to be looking for fundamental information to propel higher or break below the major support. I was interested in the break above resistance but it was on short covering and not sustainable (as discussed here last Thursday). Would prefer a break out on higher volume and gains in open interest to confirm a bias change. Until that confluence of events occur- it is probably economically wise to work the range.

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