Stocks this morning were doing incredibly well as they broke through the 50 day simple moving average (SMA). Almost at the morning high the news of the fighting in the Ukraine hit the market and they sold off. A rally back has now failed and the market is heading back toward the SPX 1940 level pushing it back below the 50 day simple moving average (SMA).
Market Direction SPX Morning Chart
The one minute chart for this morning shows the SPX as the news of the conflict hit the market right near the morning high. The initial collapse took the market down to just below the 1950 level but when the first rally failed to recover the 50 day simple moving average (SMA) stocks headed lower. Shortly after 11:30 the market tried a second rally which looks to be set to end below 1950 again. If the second rally fails to break the low of the first rally, the SPX will probably move lower in the afternoon.
SPX Market Direction Outlook Into The Afternoon
Into the afternoon the market direction looks set to challenge the 1940 level and will, I think, try to hold either around it or just above it. This is a bull market despite the Ukraine crisis and the latest rally had a lot of strength behind it. The break of the 50 day simple moving average (SMA) this morning was not unexpected but the market was fighting both the resistance of the 50 day simple moving average (SMA) and a market that was once again becoming overbought. The Ukraine crisis gives those investors who wondered when to take profits from this latest rally, the reason they are looking for.
Lower Close
With this being Friday a lot of investors will not want to be picking up positions into the weekend. Many will take profits which will keep the markets into the red. Don’t be surprised to see heavier selling into the afternoon or even into the close.
I am still trading but I am looking for those trades that are over priced and I am doing much smaller positions of even as few as 2 contracts.
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