Prepare for a bounce and retest

This is the 40 day moving average index.  $$ The value represents the percentage of symbols on the NYSE that are currently above their 40 day moving average (DMA).  Right now only 30% of stocks are above their 40 DMA.

We are now in the oversold area on this index and a bounce could happen any day now.  Notice that on drops of this significance a retest of the lows on the first bounce is expected so plan accordingly as a scenario in your planning for February.

This entry was posted on January 31, 2010 at 2:50 pm and is filed under 40 DMA % Index. You can follow any responses to this entry through the RSS 2.0 feed.