Friday, April 15th, 2016

The Bullish Cross- Technical Analysis

You have heard the 3 month old rally is about to end and blah blah and how the market is going to go down again. Walls of worries have erupted over economic recovery and the bond markets have gone wild over inflation concerns. Well that may  all be true, and we have seen how the markets are falling and going nowhere this whole month of June 2009.

The fact is after a 3 month old rally where SPX has vaulted 39% from March lows its about time this overbought market should get some rest. And it did. After moving 9 sessions sideways, its finally broke down as if to resume its journey south, but there is a  big problem this time.

Consumer mood is lot more upbeat than March, 9, 2009. Month after month consumer sentiment index has been galloping higher and higher as evident from Michigan Consumer Index reading which came in at 69 this month.

Technically the SPX and NDX were both overbought and the major leading stocks like AAPL, GOOG , RIMM, GS and BIDU were all overbought to the max. Hence we started seeing a  healthy slide in those stocks and others in a very orderly fashion, nice tight trading and spinning tops and bull flag like chart patterns.

Now the bears are tempted to push the SPX down further, but there is a problem a very big problem for them indeed facing their ambitions to kill the rally. The SPX has 200 day moving average which now acts as support and than there is a rising 50 day rising moving average about to cross from  below, Please click on chart below to expand.

If 50 day moving average crosses 200 which it did today, on $SPX it is Technically a bullish signal. A Bullish cross-over. Just like last year when the 50 day crossed from above the 200 day it signaled a bear market and which lasted for several months. This cross-over is a closely watched indicator for bulls to step in and we shall see a larger sustained upside move from here on for months or maybe years. Its this Technicality that I have been watching closely

As far as bears are concerned, if they fail to penetrated 200 day and than below that a rising 50 day moving average   both acting as double layers of support,  the bears will fail. The battle for them is over and done with. As of June 16, 2009  SPX  is also very oversold on slow stochastics and  and on my short term McClellan Oscillator. Major stocks  like $AAPL $GS $ GOOG and all others are showing the the same oversold conditions as well. This is where  fund managers and new buyers usually step  in to boost  markets. 

Stay tuned and see how it turns outs. Your comments and feedback is appreciated. What do you think will happen?


6 Responses to “The Bullish Cross- Technical Analysis”
  1. Hey, this is a bit irrelevant, but I noticed your blog page loaded lightning fast compared to mine. So I was wondering are you using dedicated hosting or shared hosting? thanks.

  2. Hello! I like the design of your blog (and content too btw) and I would like to know what theme are you using? Is it your own design or free theme? thanks in advance, regards Pete

  3. Womens Heels says:

    Hey, thanks for the blog post, but can you tell me what’s this theme you’re using in your blog? Thanks in advance, Pete

  4. Thank you so much! Great info!

  5. David Kramer says:

    We are close to Buy points on many stocks that I folllow. My main concern is the Repub Congress seems well aligned w/ U.S. media to do what ever thet can to take this ship down. Question is will the “market” believe in their mission or acknowledege reality and keep things going higher. My bet is the latter.


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  1. […] 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 […]

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