Wednesday, March 23, 2016

Cracks Developing

The Market Trend Model (data sheet) maintains its positive bias, but the major indexes are starting to show some cracks as the unprecedented February 2016 rally runs into overhead resistance.

It may be the sixth straight week of record high U.S. crude oil inventories (article) or the desperate tone of a fragmented U.S. Federal Reserve (article) that is starting to crack the market indexes ~ whatever the reason, it appears market participants are beginning to take profits at current price levels.

The Nasdaq (weekly chart) is turning away from its 40-week moving average and the Nasdaq-100 (weekly chart) is sitting right on its 40-week moving average. The S&P 500 (weekly chart) is turning down toward its 40-week moving average and the Russell 2000 (weekly chart) is well below its 40-week moving average.

After the rapid six-week oversold rally, it remains prudent to protect profits and to have an eye on the exits.