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Manic Monday

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Look at the 5 Minute chart. Since we made an short-term low midday on the 8th, we have had a nice rally – one that seems to have legs, so far at least. However, (and there’s always a however, isn’t there?) the Relative Strength Index is showing that this move has been fast and strong, and we may be due for a bit of a slowdown of the move up – but on such a short timeframe chart, that could all happen in one morning.

But look at the 60 Minute chart.

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Notice how we broke through the downward sloping near-term correction trendline. Its also hard to see on the chart, but the blue short-term moving average line has turned up – what we want to see is this move up through the red long-term moving average line. That, if it happens, would lead us to feel better about the rally and its potential length.

So, what happened today to push us higher?

Fundamentally, good news from Barclays Plc (a British financial firm) were stronger than expected and the New York Manufacturing Index came in stronger than expected. These two pieces of news led people to feel better about the prospects for the global economy – and led them to think of something other than sovereign debt problems in the PIIGS.

Technically, on the 5 Minute chart, you can see that the short-term trend line has crossed the long-term trend line. That is always a positive thing for short-term traders who move into buying mode. That, combined with good fundamental news, helped push the market up today.

I had such a crush on the lead singer of this band in the mid-80’s. Your trivia today is to name her as well as the very famous singer who wrote this song. Come on 80’s music buffs, this one is for you!

Mark