Stocks Break Through Resistance
Stocks opened higher today and never looked back as the Dow Jones Industrials ended the day up almost 500 points! As you can see in the above chart, all 3 indices are now above their 50 day moving averages. The NASDAQ is clearly stronger than the S&P and the Dow.
I've been bullish on the market based on the weekly bullish engulfment but was waiting for a pullback to buy. I honestly thought we were going to get some kind of a sell off which would allow me to get long but obviously that didn't happen.
In the above chart I outlined the basic swings since the beginning of the year and as you can see all 3 indices are still making lower highs and lower lows. A move above point(A) would turn the trend from down to sideways/up.
Right now I have no position in the S&P but will keep you posted if I see a low risk trade.
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2 comments:
hi can you take a look at gold and silver..i see that there is a divergence between gld and slv.gld made a new reaction high and has now pulled back.slv went up as well ,but is nowehere near its high from last year.so is this a sell signal
Excellent question. The divergence between gold and silver bothers me and is preventing me from being buillish on these two metals. I'm still cautious on gold and silver which is why you haven't seen me with a long position. If I see signs of weakness, I will look to short but right now the trend is up so why fight it. A move below last week's low would tempt me to short silver.
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