McCain Breaks Cup & Handle

The McCain Presidency contract broke above the 20 & 50 day MA’s in early August and has held the gains nicely. Since the beginning of August there has been a nice pattern of higher highs and higher lows. With a rising 50 DMA, this market remains “innocent til proven guilty”. Notice the shakeout below 38 prior to his speech, from failed moves come fast moves? The contract is tracing out a bullish cup and handle which shows strong Republican momentum.

At the same time, the Obama contract is looking like stage three distribution. With this contract below the declining 50 DMA, I would be thinking of exit strategies if it breaks what appears to be key support near 56.

DISCLOSURE: NO POSITION

Thanks for pointing this out, Eric.