Was today just another bull market rally or the beginning of a real bottom? That's the million dollar question. We've seen this type of day plenty of times over the last few months, especially after a Fed action, but they haven't had any follow-through. Despite the impressive gains today the indices haven't even risen above last week's highs yet. That could be changed pretty easily but in my eyes, the February highs are the ones that are really important. The key obstacle I see between here and those February highs are the declining 50-day moving averages. I suspect that the hardcore bears will look to reload around those 50-day moving averages.
Here are the S&P and Nasdaq charts. Normally I'd complain about the volume but given that trading is usually pretty reserved on Fed decision days until the 2:15 I think the volume level was pretty good.
Al the short-term trends are up now
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Down | Down | Down |
| Intermediate | Down | Down | Down |
| Short-term | Up(+) | Up(+) | Up(+) |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Mike,
Good post and I agree. I've been looking at the S&P 500 and it looks like resistance appears to be both 1330 (50% Fibonacci Retracement) and also the 50 day moving average. Will this be a low risk place to start a new short position on the S&P 500?
My Post on March 11, 2008:
Double Bottom or new Opportunity to Short?