Technical analysis may work best when fundamentals get thrown out the door, but they must always be watched for their self-fulfilling prophesies. Today, the S&P 500 (NYSE:SPY) bounced off support at the popular 200-day moving average. It’s the second successful test since June 16th.
However, the more times a battle is waged at a certain technical level, the higher the chances for failure. So, if you’re a stock bull you’ll want to see investors support the S&P 500 at the 200-day moving average by saying, “I find value in the market at these levels.”
Regardless of the short term effect of the 200-day moving average, the real battle will be waged starting July 11th when earnings seasons starts anew with Alcoa (NYSE:AA).