Major averages fell yesterday on higher volume with major indices closing below their respective 50-day moving averages. When the market has a distribution day on day 3 after a follow through day, the rally fails at least 3/4 of the time. Further, when the market undercuts the low of the follow through day, the rally usually fails. Taken together, the Market Direction Model has switched to cash.
The 30-year Treasury yield hit at all-time low while the price of oil continued it's freefall, falling nearly another 5%. With the quantitative easing switch off in the US while on at other central banks, the US dollar continues to rally. Falling Treasury yields even with no QE in the US at present could be a sign of scared money buying US Treasurys as the US is the tallest standing midget in this recessionary and potentially depressionary global situation.
Futures are trading sharply higher this morning.
We note that short-sale target Workday (WDAY) has pushed up into its 200-day moving average, which provides a nearby reference point for an upside stop. If this morning's futures jack fails, this may become actionable.
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