All of the market action recently is beginning to look very good. All of the averages are trending upward closely with their respective 20-Day, and now upward sloping 40 & 50-Day MA’s.
There is a showdown coming soon though as they all will come up against their 200-Day MA’s. This could prove to be a major challenge. The NAZ has already tried to conquer its 200-Day MA for 4 sessions now and has failed each time. We don’t like that action because down move was on significantly higher volume. The one good aspect of the NAZ action is that the QQQQ held above its 200-Day MA, and its 20-Day MA, which is about to make a Bull-Cross of the 200-Day. This is an important one to watch.
All of the averages have also now reached another resistance trend at the still down-sloping 40-Week MA. All but the DOW so far have tested their 40-Week and have yet to hold above it, though the QQQQ has cleared its 40-Week MA and is now looking at a test of its 50-Week MA, which is technically more significant.
These challenges against the 200-Day, 40-Week, and 50-Week MA’s are the ones to watch over the balance of this week and next to gauge whether or not we have a “real” market reversal rally in progress.
