Is It All Over? (The Cestrian Circle Newsletter)

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Analysis by Alex King, CEO, Cestrian Capital Research, Inc.

So, everything went up a bit too far too fast and now it has fallen back a bit.

As of yesterday’s close, the S&P500 index was holding over all the short-term moving averages we use.

Not bearish.

In pre-market trading today, NQ e-mini Nasdaq futures are a little below the 8-day moving average but still quite a way above the 21-day EMA. So the first tripwire has been tripped but the more important support level, that 21-day, is intact.

Personally that 21-day EMA in the indices is what I am looking to as a marker of bull phase or bear phase. If the 21-day EMAs give way then we’re into a period of weakness; if they hold, we’re not. Sometimes things are that simple.

So let’s get into the detail.