Friday, December 07, 2012
Stock Market Commentary:
Monday-Wednesday’s Action: Stocks Fail At 50 DMA line
Thursday & Friday’s Action: 146k New Jobs and 7.7% Unemployment Rate
Market Outlook: Downtrend
From our perspective, the market is in a clear downtrend until the major averages break and close above their respective 50 DMA lines. It is encouraging to see that the major averages are down less than 10% from their 2012 highs. On October 9, we said “the rally was under pressure” and then said the “rally was over” on Oct 19. Since then, stocks have gone straight down and a lot of technical damage has occurred. We will turn more bullish once the major averages confirm a new rally attempt and then trade back above their respective down trendlines and 50 DMA lines. As always, keep your losses small and never argue with the tape.