Not only did the markets gap into the 20 and the 50 moving average today, but many leading stocks did as well. This tells smart traders that Wall Street may struggle a little in the next few days while it consolidates below this level. So far the markets pulled off this resistance level all the way to the flat line before bouncing back a little.
Some of the major stocks that opened higher but into resistance were Google Inc. (NASDAQ:GOOG), which opened into the daily 20 moving average and International Business Machines Corp. (NYSE:IBM) which into the 20 and 50 moving average. Again, the key here is to recognize that leading stocks are hitting resistance ranges just as the markets are doing the same. This basically means that traders are now moving from a bullish bias over the last week to a more neutral or neutral to small negative bias.
Reading the charts is the number one thing any successful trader does. The charts tell the whole story while the media and fundamentals only tell half. Learn the charts and profit.
Chart provided by: RealTick LLC