Please enable javascript in your browser to view this site!

Is it REALLY safe to Sell a breach of the 200-day? Sometimes yes.. sometimes No

Today's snapback higher put "egg on the faces" of those who used the break of the 200-day moving average(m.a.) to sell stocks yesterday, and as we've discussed, the SLOPE and/or how much an asset is above or below a 200-day m.a. means far more than simply "touching" a moving average in of itself for purposes of attempting to find support.  While this can occasionally work, i..e Feb 18, and/or Nov 16, there are other times when it turns into a miserable failure such as Oct 14, while most of 2015 saw price ebb and flow above and below the 200-day ma all year long with no apparent rhyme or reason. Utilizing Price and time analysis is truly the key to trying to find tops and bottoms, & one should utilize Fibonacci analysis in a similar fashion.  Those who simply attempt to buy stocks based on a touch of a level like this will find inconsistent results at best.   Our morning note talked about the reason for covering shorts into 4/2 close, which had to do with near-term oversold conditions, positive momentum divergence, signs of fear coming back into the market, and capitulatory signs of volume, as we saw the 2nd straight 90% Down day and a huge TRIN reading of 2.5+.  Demark indicators were also important in thinking we were close- For more info and daily/weekly Technical thoughts, visit