Just a Sideways Day...

As I've always said, no matter the news, a few days of sideways days always follow significant up or down days. However, one thing made this sideways day a slightly dangerous one; The 200 days moving average. The Dow is right on its 200 days moving average at last. This is the first time the Dow has visited this line since May 2008! Technically, 200 days moving averages are strong support/resistance levels for intermediate and primary trends. If you look back on December 2007, you will see the 200 days moving average providing significant support before the weight of the crisis come crushing down. That said, yes, the 200 days moving average does nothing to change the big trend changes. Is this one of those? Looking back at history again, we can see that once the Dow crosses the 200 days moving average from below, it rarely looks back. So this might be a defining moment for whether or not this is a real Bullish Reversal as well.

For now, short term bullish momentum remains strong and tomorrow's Factory orders might provide some stimulus past the 200 days moving average if it comes in exceptionally strong. If not, then it will be sideways til this Friday's Jobs Report (see Stock Market Calendar)... which is going to indicate a higher unemployment rate, no doubt, lets see how investors react to that.