Last few posts I was concerned if $SPX would not make it and go lower. Here is what is going on in current stock market.
But at the last minute, just by sheer luck as if it had to happen $SPX pulled up from the Bullish cross. Yes we could have been in the 860 area or lower for $SPX or even at 800 levels, but we did not, and ended up closing today at 919 down few points after a 3 day old rally. As you look at the daily chart of $SPX you cannot help but smile at the artwork our bullish friends pasted on them. When we have a 200 day moving average crossed by a arising 50 day moving average its a great sign of strength. When was the last time 50 day crossed 200 day from above? That signaled a bear market didn’t it? We spent a full year with these two moving averages running above price action. Click to enlarge chart.
This was no easy feat for Bulls. Not to say the least, bears did try their level best to kill 2 birds with one hand and failed at it and lost lots of money when their trades blew up. I hope we just keep bouncing off these to support levels on the 50 day and 200 day averages for few months and consolidate over the summer and than take off in the fall.
Market internals are are not all that strong and there are walls of worries and usual dark and depressive mood and negativity. There are lots voices of concern and worries about the economy. Some more shrill than the pthers. In my opinion, the prophet of doom Nouriel Roubini is singing like a Canary in a coalmine. He is having a last shout at it. That however is a contrary indicator for more bullish moves to come. Today the consumer confidence index slided a bit and came lower and that stalled the 3 day old rally. We have to keep watching these markets and what brings next.
Most major indexes are showing lower volumes which is expected in the summer months. You will not have a full house on days when the sun is warm and kids are out of school and wanting to go camping. Many traders are on vacation during these months. These volulmes are not a concerning factor that markets are about to die. However lower volumes do not push stocks higher either and we may not see strong bullish moves.
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