He had some worthwhile comments this AM regarding the technical picture of the major indices, using 50-day simple moving averages as a rough way to measure momentum.
Jim notes that “when a stock breaks below that level it reaffirms the problems that a break in the trend line is indicating.”
· The S&P 500 has broken its trendline and its 50 dma;
· The DJIA has broken its trendline and its 50 dma;
· The Nasdaq has broken its trendline but is still holding its 50 dma;
· The Nasdaq 100 has broken its tendline and is holding its 50 dma;
· The SOX is holding both its trendline and 50 dma, which is a positive. (Watch this group closely. If it takes out support it bodes poorly for the broader market, particularly the Nasdaq);
· The Russell 2000 has broken its trendline but is holding its 50 dma. (Small-cap should lead a bounce so watch this group)
He’s short the QQQs, and thinks there are “plenty of technical problems out there”
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