I think it’s pretty safe to say that stocks have held their key support levels! Over the past few weeks I have eluded to the need for the markets to hold their respective 200-day moving averages – (blog), (blog). Not only did the key indexes hold support, the big four have reversed course impressively. It’s amazing how even the most basic technical analysis can be so accurate at times. Let’s take a look at how these indexes held their 200-day over the past couple of weeks before reversing, (please note that the sloping red line at the bottom of each chart is the 200 day moving average) – Dow (chart), S&P 500 (chart), Nasdaq (chart), Russell 2000 (chart).
In my humble opinion one of the key factors now in order for this momentum to continue, is that Greece pass its impending austerity plan. If that goes as expected, this rebound should continue and I will then be looking for the S&P 500 to break through and stay above the 1300 level.
Have a good evening.