back to blog homepage

The World Just Moves Faster Now

sp-500-boxed1

Yesterday I wrote that the green box on the chart above would tell the tale for the market. I didn’t think we’d move up through the top of the box AND the 200 day moving average so quickly, but we did.

It looked like a lot of people were caught on the wrong side of the market (lots of short positions that had to be covered), thinking that we’d hit the 200 day moving average and be turned back again as has been the case several times in the past couple of weeks.

However, today was the day to break higher – but the volume looks pretty anemic, just fractionally higher than yesterday’s down day.

From a technical indicator standpoint, the MACD at the bottom of the graph has decidedly broke into a positive move. It is still below the 0 center point, and it would need to move above 0 for this to show we have traded our way into an intermediate term up-trend (that elusive Summer Rally), but we will take the positives when we can get them after the ugliness that was May.

With the broad market truckin’ higher, I thought I’d give you an update on the purchases we made in the “Buy Zone” (the purple box on the graph above) that I described a few posts ago. As of close of business today, we are up 1.47% on those buys that we started at the beginning of May compared to the S&P 500 that is down 5%.

So, we are pleased with the execution of our plan.

The next critical level is the blue 50 day moving average. We’ll see if the momentum from crossing the 200-day line can get us there. Expect us to retest the 200-day average – its a typical technical move to have a down day that settles around the 200-day line – if the 200-day line holds, we can then try for the 50-day line. More on that, though, as things progress.
Mark