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Markets Pause After Recent Run

May 12 2009

Markets Pause After Recent Run

Taking a look at the S&P 500 chart today showed a 5 day top formation which was enough for me to close out my Ultra S&P 500 Proshares (SSO) positions that I had. Two positions were quite profitable near 20% and 15% with the third recently purchased position losing about 2.5%. When the S&P 500 broke below the recent low of 902, I felt it was time to sell. In addition, the NASDAQ has not performed well the last couple of days and the Bank Stress Test completion didn't provide a catalyst beyond Friday like I had hoped.

Simple Moving Averages

I still think there is more upside on a longer term basis as the simple moving averages remain bullish. Charting the 3 month S&P 500 with the 5 day moving average and the 13 day moving average shows a break of the 5 day moving by the current price but the index is not close to having the 5 day moving average break through the 13 day moving average which is a clear sign of a reversal of direction. And with longer term averages like the 13 day vs the 50 day, the spread between the averages is even greater.

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