The market has remained in the chop zone, with much of the action being dictated by the outcomes of big-stock earnings reports. On Monday, things looked to be starting out with a bang on the back of a strong earnings report from McDonald’s (MCD). But, as I tweeted early in the day, the gap-up rally looked like it could simply serve as the peak of a fourth right shoulder in a possible overall head and shoulders formation that has been “in process” since the end of last year.
That turned out to be the case as the stock quickly reversed the next day and broke back below its 200-dma this morning. It moved lower all day and finally ended up on top of the confluence of its 10-dma and 20-dema. The 50-dma is another 1% lower at 159.06, so we’ll see if Mickey D’s ends up taking that moving out as well on the way down.
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