Avoided a Test of the 200 Day EMA Friday, but Looking Likely Today

Interesting action the past two days, even within a technical lens. I had not looked at the 200 day SIMPLE moving average Friday but that is essentially where the market fell to, before the mid morning reversal in anticipation of a weekend debt deal. The 200 day EXPONENTIAL moving average was not close to being tested.

However with the bipolar action today, we have broken through the simple moving average, and look keen on giving that 200 day exponential a run for the money.

There is still a lot of headline risk later this week as its the big week of economic data (ISM Mfg, ISM Services, Monthly Employment), so trying to game short term moves on random headlines is not a game one should be playing.

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Effectively this debt limit is/was a side show – the U.S. economy has been reliant on drugs and steroids for years on end, and as the most recent batch of injections have slowed down (even with never before seen easy monetary policy) the economy is huffing and puffing. All the Wall Street economists who came into the year singing songs of 4% GDP for 2011 must be shaking their head.

Oh well, now they have another excuse for misdiagnosing how poor the economy is under the steroids – they can blame the Q3 weakness on ‘uncertainty over the debt ceiling’ – it’s always one thing or another, rather than admitting the patient has structural issues.

About Mark Hanna 543 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

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