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SPDR S&P 500 Message Board

  • eyeinthesky_2014 eyeinthesky_2014 Aug 24, 2013 4:15 PM Flag

    New Market Highs Are Almost Inevitable

    Two days ago the bulls reclaimed the 50 DMA after surrendering it about a week ago. The bears unsuccessfully tried to reclaim the 50 DMA yesterday but were unable to despite large amounts of selling early in the morning. Now that the ownership of the 50 DMA has been put to rest, we now move on to the 20 DMA. The 20 DMA is about 25 points up from where the market is right now. Recently clearing the 50 DMA should give the market some momentum early next week and we could see a test of the 20 DMA sometime then. In any event, I expect the 20 DMA to be tested in the next couple of weeks. The 20 DMA usually provides much less resistance than the 50 DMA and I expect this time to be no different.

    The all time highs are another 20 points up from the 20 DMA. Assuming the 20 DMA is cleared, I have a hard time believing the bulls will not at least test the all time highs. Given how oversold the market is right now, I believe that we will see new highs sometime probably early to mid September. As is the case with putting in any top, it will be up to the shorts to determine the actual timing of the top. If shorts short covering Monday morning (like they should) because the 50 DMA has been surrendered then a top could be put in sometime in the next two weeks. .However, given how suborn the current crop of shorts seem to be, nothing short of a spectacular new high will probably shake them out of the short trees. If that's what has to happen, then so be it.

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