I left the 50, 100 and 200 day moving averages in this chart to show how fast MDY has come off its lows.  Just one month ago MDY was trading below its 50 and 100 day moving averages, but now it’s more than 4% above its 50 day moving average and 7% above its 100 day moving average.  MDY hasn’t touched its 200 day moving average in a long time and would have to fall almost 13% to cross it again in the near term.  The 200 day moving average is moving higher every day, but it’s easy to expect a reversion to the mean and see MDY fall 5-10% to get closer to it.

For an odds play, MDY has finished higher each of the past seven days.  I don’t expect that trend to continue.  I’m not shorting MDY here, but have thought about buying some puts or at least a vertical put spread to gain on the impending dip I’m predicting.

• MDY found support yesterday at the point of its short trend line of lower lows and its longer trend line of higher lows
• MDY hit resistance today at its 50 day moving average
• Williams %R is starting to edge up and become bullish, but that will fail if resistance holds today

Opinion = I’m waiting to see if the 50 day moving average maintains its power of resistance and if the longer trend line of slightly higher lows mentioned above holds.  One is going to give soon and that will point the direction for the following week or two most likely.