Hey Market Pilots,
The market has been changing character lately. I have been able to find setups, but they only last one to three days and then it all gets given back. There is less and less of a trend to the upside as it appears tops are starting to form. Then, looking around the market, I notice many names are starting to fall below their key moving averages and stay there.
One of those names I have been watching as a good example is Disney (DIS). When looking for a long move, we define support levels and then moving averages that price can follow to the upside. So far the price has been able to pop over something like the hourly 50 simple moving average (SMA), but it won’t hold. It can be a little deceptive as to what is going on because it seems as though price was holding the $181 level, but you can see what’s really going on if you zoom out.
Pull up a chart of DIS (see below) and you can see the Hourly 200 SMA is the boss now. That $181 level is just an imaginary area of support, whereas the 200 is clearly what is knocking price down ever since it changed direction late March.
Start paying attention to moving averages like this when you are looking through your watchlist. Overhead moving averages acting as resistance are becoming more prevalent and that means you sit on hands or you start tackling the short side.
Your Profit Pilot, TG