It's been a wild ride already this week with the markets falling to critical levels then seeming to try to bounce off them. The S&P 500 (NYSE: SPY) started the week piercing through the 200 day moving average which is an important technical level. By Tuesday traders came in and attempted to buy the bounce off the 200 day but were not able to produce a significant rally to erase Monday's losses. For now it seems that the market is in a "Sell the bounce" type of mood where every bounce gets sold into new lows.
The Nasdaq 100 (NASDAQ: QQQ) also moved down towards the 200 day moving average but did not pierce or touch it. The tech stocks continue to get sold which has been part of the blame for the recent decline. As of this writing the QQQ is holding on to gains of less than 1% for the year.
Those that follow the Dow 30 (NYSE: DIA) will note that it too has to deal with the 200 day moving average. Price has been hovering right on it and many technical traders feel this is the time it breaks below it. For the year the DIA is lower by almost 3%.
The energy sector (NYSE: XLE) broke to new lows on Monday but immediately reversed all those losses by the close on Tuesday. This is an intresting technical pattern that seems to suggest prices will move outside the range. The XLE has been trading in a sloppy range for the last two months but this reversal Tuesday show strong buying interest that may attract new investment.
Lastly, Gold (NYSE: GLD) continues to trade in a volatile range, but hinting at a breakout. The GLD has had many 1% swings lately as investors start to shift money over to the precious metal. Technically speaking the GLD is trading in a bullish range which leads many to anticipate a break of recent highs.