Major market indexes had a horrible December, culminating in a final thrust lower on Christmas Eve, some holiday gift. But when we woke up on Boxing Day things had changed. That started a run higher in equities that continues to today. Into its 6th week, most market indexes are still under their 200 day SMA though. It was a deep cut.
The Dow Jones Industrial Average (DJIA) is the one exception. It was the first index to push over its 200 day SMA, closing above it Friday and continuing higher Monday. This is a good first step in a recovery, but it is still far short of making a higher high to claim a recovery.
The chart above shows the path both down and up, the familiar “V” shaped recovery we saw in 2016. It also shows the prospects are good for more upside in the DJIA. The Bollinger Bands® are pointing higher. The momentum indicators are rising and bullish. The RSI is strong in the bullish zone with room to continue up and the MACD is positive and moving higher. A good start, but it needs to move over 26,000 before we can move back from the edge of our seats.
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