The battle for the 50 exponential moving average (ema) on the SP 500, has been going on for the last eight trading days. On April 10 and 11 Common Sense was winning, on April 12 Irrational Exuberance led, April 13-14 were essentially draws, and then on April 17 Irrational Exuberance regained control above the 50. It appeared the bulls were winning the battle aided by friend Options Manipulator, but RSI, friend of Common Sense and the bears, at the moment, think otherwise. Yesterday and today were volatile, but generally down, with a spinning top candlestick touching the 50 ema yet again. The battle rages on, and the final act is just days away, or perhaps even tomorrow. Common Sense has been quietly working behind the scenes constructing a peculiar formation they call a “bear flag”. To sum up, seven daily 50 ema crosses or touches in eight consecutive trading days and the final outcome is still up in the air.
