The bears have wiped the floor with the bulls in the last three trading sessions with S&P ending the week below its daily MA(200). Let's just step back and take a look at the slightly larger picture.
Since the middle of September, the index has formed a series of lower highs and lower lows (see 1-2-3-4 in the chart above). 1-0 to the Bears. And as already stated above, the index closed below MA(200) for the first time since June last week. 2-0 to the Bears. Of course, the bulls are expected to fight back as they very well should. But straight ahead is the big resistance in the form of 1400-1405 level. 3-0 to the Bears. If the bulls manage to crack that, straight ahead will be the MA(20), which has proved to be a tough nut to crack in the last couple of weeks. 4-0 to the Bears. I am going to stop keeping score now as this is just getting cruel. But it must be mentioned that straight after MA(20) looms the MA(50).
So, the bears look totally in control right now and in the markets, unlike in sports, its not fashionable to root for the underdog. The bulls have a lot of work to do and a lot of resistance to overcome before the index starts looking bullish again.
Take care and good luck!
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