It seems as if the tides are slowly changing after taking a look at the intermediate and long term charts of the markets. Let’s examine them together.
Dow:
After reviewing the daily chart for the Dow, it seems to me that there is a new uptrend forming and the price bars broke through the 20 period MA. It has already made a higher high and a higher low but I will not be fully convinced until price breaks above 12930, the near term resistance level.
When you zoom out into the weekly charts we see that the Dow is still in a downtrend. The last week made a valiant bull rush and made 650+ gain from its lowest to highest points in the week. The 20 & 50 period MA did not cross, in fact, the 20 period MA seems as if it leveling off (lateral).
NASDAQ:
The NASDAQ daily chart seems to be trading in a channel between 2320 and 2410. Friday’s bar did break past the resistance and tagged the 20 period MA to show signs of strength. Its too early to see if this will continue to create a new uptrend. We do see higher highs and a higher low but we have yet to break past the point with conviction.
When looking at the weekly charts, we see that we are still in a confirmed downtrend. Like the Dow, we had a strong push by the bulls in the previous week. The 20 and 50 Period MA did not touch and the 20 MA is not in such a vertical downward dive and seems to be leveling a little more. So far a good sign of upward movement.
S&P 500:
The daily chart is telling us several things. If you look at all Moving Averages (20, 50, 200), we see that they are leveling off to make more of a lateral movement coming off from a definite downtrend. This means that there is strength showing and that the S&P 500 is Neutral. If you take the pure price route, you see that we confirmed an uptrend on Thursday and Friday by breaking the higher lows and higher highs. We can wait for the MAs to start moving upwards for further confirmation.
The weekly chart is telling us a similar story as the Dow. We are still in a downtrend in the long term but the bulls had a strong victory in the previous week. The 20 & 50 MAs did cross, however, they too are now moving towards a lateral direction. If the next week shows strength, we will probably see these MAs crossing once again.
We had an interesting week where clearly the Bulls are starting to win this market over. It will be interesting to see what the next week has to share with us. In the meantime, here is a summary:
Intermediate Trend:
Dow - Uptrend/Lateral
NASDAQ - Lateral/slight uptrend
S&P 500 - Uptrend/Lateral
Long Term Trend:
Dow - Downtrend
NASDAQ - Downtrend
S&P 500 - Downtrend
Be careful and Trade Safely!