Choppy Action, Dow Struggles

As everyone knows back in late February all of the major averages took a nosedive breaking their 50 and 20 smas. Then a couple of panic drops, even though they didn't feel too panicy, brought us to a near term low. Since then we've been in an upswing with all of the averages putting in a good move last week. This move has been a strange one however and it seems many technical guys out there, myself included, are wondering how we could get such a sharp climb back to where we violently broke the 50 sma. Regardless of what TA rules it broke and which it didn't, the averages made the move and now aren't very far from where they were before this whole incident.

So, where do we go from here?

Well, the Dow has yet to break back above it's 50 sma, signaling weakness. However both the Nasdaq and S&P remain above their 50's although just barely. The 50's themselves are beginning to slope downward, providing less and less support for these averages to rest on.

This situation is a bit peculiar. On one hand, you have the strong move the markets made last week and the fact that market has seemed to regain footing a bit more so than expected. On the other hand, you have weak intraday action and fading support. Things seem to be a coin flip right about now. However, i would err on the side of caution and the fact that the market is overbought currently and stay out, until a clear signal emerges.