VWAP Charts 3/24/09 Close

Earlier in the day I suggested on twitter that the 2 day VWAP would be significant TODAY and after holding those levels for most of the day, they were violated late in the afternoon. The significance of the 2 day VWAP is that the average long participant since the “new Geithner plan” is now in a losing position and the average short is in a profitable position. While it is just a 2 day battle, it is significant because of the strong emotion associated with the large advance yesterday. Of course, the 2 day chart has to be looked at in a larger context as well. See the chart of the same indexes since the 3/10 move began below.

The charts below are 20 minute candles with the VWAP since the 3/10 move began (purple MA), the 5 DMA (orange). The 5 day MA’s are still advancing as is the average price since the rally began so it is still too early to look for a complete failure. These moving averages and the trendlines will be important areas to watch for potential support to emerge from as it looks like the market may be at the beginning of a more meaningful pullback with the short term lower highs and lower lows.

In other important news…