Nov 03, 2009 (AdviceTrade via COMTEX News Network) --

The bears are trying. I'll give them that. After all, they've taken out the 50-day exponential moving average on the Nasdaq and have kept it below for a few days now. The S&P 500 is playing leapfrog with the 50-day exponential moving average. Above. No below. No above. No, on it. Ridiculous really.

The Dow refuses to break but clearly is the least important of the major indexes as it's only 30 stocks. However, it is important to some degree and they just can't take it below the critical 50-day. So yes, the bears are trying, but overall, still failing to break this market in a fashion that suggests something much worse is on the horizon. I would be convinced of that if they could break all of the 50-day exponential moving averages and then run with it. In other words, break the 50's and then slaughter the bulls. Not happening right now. No evidence that it will.

The daily charts remain oversold as do the short-term charts. When MACD's get compressed such as they are on the short-term charts and those compressed MACD's are confirmed by oversold oscillators on the daily charts, it is very hard to get sustained downside action. Again, the same reminder, markets go up far more than they go down, and when you get the daily and short-term charts at oversold, you are not likely to get too much more selling unless the market is about to get slaughtered, and that's just not in the cards. Can the S&P 500 fall another 2% to 1020 massive support. Sure. Much beyond that I don't see it near term. If we get down there, we will have massively compressed charts everywhere that would snap soon thereafter. As far as longs go, many more stock charts are starting to break down and any move up will have big gaps to deal with and that makes sustainable upside extremely difficult.

Can you say cash? Sorry folks, but that's the way it is. It'll change but it is the right way to play in my mind.

Massive support is at 2040 Nasdaq, breached a few times Monday but held at the close. 1020 is the number on the S&P 500. These levels are the recent lows from roughly a month ago. For the Dow, the number at support is its 50-day exponential moving average still not even breached, currently at 9684. Resistance is key at 1060 S&P 500, then 1074 and finally 1101. This is a very important time for the market, as most times seem to be, in that the S&P 500 is playing with losing its 50-day exponential moving average and with financials being so prevalent in this index, it would not be good if we lost those stocks as they lead the economy and the stock market. They were the culprits of this mess and thus they need to act well, showing that things are improving, before we can feel better about this market.

A tough market to play folks. Although things have deteriorated some, and yes, things don't look great, the bears are losing momentum down here at the 50-day exponential moving averages on the S&P 500 and Dow. It makes the risk-reward weak for both sides. We want something that tells us the risk-reward is powerful in one direction. That most definitely does not exist today. We have Federal Reserve Board Chairman Bernanke's ruling on interest rates and his thoughts on the state of the economy this week, and the powerful Friday's Jobs Report. It may be another week of meandering until these events become facts to the rest of the world. The market is anxious to know about the Fed's thoughts on future interest rates. This will affect the dollar, of course, which affects the markets. It wants to know if job losses are indeed worsening. A very interesting week is dead ahead. Don't overplay this mess. Cash or almost all cash is the way.

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