To The Moon

The battle of the 200 moving averages

Thursday saw the markets $DJIA(.DJI)$ , $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ closed. It is a short trading day coming up on Friday. So light volumes are to be expected and with so many in holiday mood, there probably won't be much action in the markets.

The downtrend line beckons for the bulls and this represents very strong resistance and a place to make a point. Overcome it and hold it and that would make a strong statement to thebears that the bulls are here to stay. Get pushed back from here and everyone will say 'Told you so.' 'Just another bear market rally' some will say. And the list goes on from the many experts out there some of whom only a year ago interestingly believed the market will push on at much higher levels from here! Sentimentsreally have a weird effect on the human psyche! 

One thing is for sure. The bears are waiting inabundance at the downtrend line. And they will try all they can to bring the bulls down. Therewill be some bulls who will lead the line and try their best. But a massive amount of effort isrequired for this endeavour and I believe for that to happen, the next pullback is very important. 

As mentioned in previous articles, I am lookingfor a bull's retreat and regroup at the wave 2 base from where a position of strength can beestablished before mounting an operation witha reasonable degree of success to overcome the bear's holding position at the elusive downtrend line. That position is the coveted objective. Any side which holds that convincingly will hold the upper hand. At the moment, it is in the bear's posession. But momentum seems to be shifting in the bull's favour. However as weall know, momentum is fleeting. If the bulls don't take advantage of it, it will still be some time before we see the bulls take over. Holding the necessary levels and taking advantage of the market's technical structure will win more over to the bulls' side and create higher probabilities of overcoming the prime objective. Only then can we dream of a bull takeover. 

Now is time to be cautious for a wait and see approach to see how the bulls take it from here.

Thanks for reading my commentary.

Stay safe 😊