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Moving Average Holds – Rally Continues

As you can see on the chart above, the moving average acted as support for the stock market and we are again moving higher. There is a significant amount of money on the side lines that needs to come into the market, and every time we have a bit of a pullback which holds support, investment managers are encouraged to put their cash to work.

For new readers of this blog, you can look at the early March postings to see why we called an intermediate bottom to the bear market – I bullet point the reasons why the market was ready to rally. Those reasons are still valid and we should continue the move to the 200-day moving average (Dow 9,250 and S&P 975) at which point we will reassess the state of the market.

This sure feels better than the market post-Lehman Brothers bankruptcy.