Adding some moving averages to an intraday chart can give you some decent clues to whether the market is displaying bullish/bearish behaviour. You can see that the green box shows the Djia trending higher with the moving averages in a bullish alignment as the RSI makes higher highs and lower lows.
With the big sell-off that started the week off on Monday you can see how the moving averages realigned themselves downward (Red box) and the Dow has been trying to get back above them all week without much staying power. You can also notice how the RSI is trending lower confirming this analysis. While the headlines will continue to paint a rosy picture on the markets, you might be surprised to find that we’re down -175 on the Dow for the week and -21 on the Nasdaq. If you based your bias on the markets from the media, I’m sure you’re loaded with longs in your account.
Just trust me when I say that this is not a time to be heavily loaded in any direction, as moves can come swift and without any notice.
