The markets bounced right ‘on cue’ – the major indices were each testing the levels of their 30wk.moving average and duly bounced off of them.
The point about this is that it is very often the case that an index (or a stock) price will travel to ‘meet’ its moving average and, on that meeting, it will change direction. Thus it is that the direction of the moving average is an important indicator of the main trend of the market (or stock) and why we can anticipate a bounce when a price is falling to the level of its moving average.
Anyhoo, what this suggests, for the time being at least, is that there is some underlying strength to the markets and that we might start to look for the possiblity of new ‘bull’ market trends being not too far off. But please don’t rush in and over commit tothese markets yet; they are still volatile and there really isn’t the mass of volume that we would like to see and on which more definitive trend indications can be made.
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