Yesterday's pre-market reading for the index stated that if the 8-day EMA is breached, then the 21-day EMA is the next best re-accumulation range. We saw selling pressure intraday however, the lows of the day were exactly at the rising 21-day EMA. This is testament to two things: (1) the algos always seem to respect this level (range) and (2) the reading from the Tactical Trading Guide was in line. The index closed at the mid-point of the 8 and 21-day EMA. As per the 7-day RSI, the index trades in a NEUTRAL range. It may also be worth noting that the index has retraced toward the 50-61.8% Fibonacci retracement range, which could seen an overshoot to the downside.
Lester Davids
Analyst: Unum Capital
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