U.S. stocks made modest gains today, after Tuesday's huge run up. The market now sits within close proximity to overhead resistance in the form of a moving average I utilize as part of my analyses. With today's narrow range, and the fact that the averages closed near where they opened, the trading pattern suggests that Thursday or Friday could be a sizable day to the downside. But, since the market was so oversold before yesterday's rally, I am not sure we will get a huge move to the downside. What would be a clear sign of strength is if the market can rally on Thursday, and ultimate close above today's highs. If we could then close above last week's highs, then we might be on to something!
With all this in mind, be careful trading the next couple days!
Scott Cole
www.bestdaytradingstocks.com
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