Charting Stocks

Last week, we mentioned that technical indicators began to turn negative. Technical damage continued today as the Dow Jones Industrial Average, Dow Jones Transportation Average, and  S&P 500 closed below their pivotal 50 and 200 day moving averages (first time since March), with all 3 averages registering an RSI sell signal.  NASDAQ bucks the trend and remains above both critical levels.

Tech stocks (NASDAQ) fair much better than the previous 3 major averages. The chart below shows the price levels holding both the 50 and 200 day moving averages. Momentum indicators, however, tell a different story as the RSI falls below 50 along with a dead MACD cross.

Short ETF’s (bets against the market) continue to look as though they’ve bottomed. The ProFunds UltraShort Rusell 2000 ETF (NYSE: TWM) seems to be breaking out with bullish momentum (RSI and MACD).

ProFunds UltraShort Dow 30 (NYSE: DXD) may be breaking out as momentum turns up.

Related posts:

1. S&P Breaks Uptrend; Dow Jones Closes Below 200-Day-Moving-Average
2. Dow and S&P Close Below 2002 Lows
3. Dow Breaks November Lows; Triggers Fresh Dow Theory Sell Signal
4. Forecast 2009: There Will Be Blood
5. NBER’s Recession Call & The Importance of Stock Charts