Today the major indices made an important move to regain the 200 day moving average and clear resistance on higher volume. After making 2 previous attempts to cross the 200 day the markets are appearing to have made a successful double bottom. The double bottom pattern would be more confirmed if the volume on today's breakout was above average.
Nevertheless, it was higher than the previous day which means the bulls have won the short term battle and are in charge.
Also the Dow made a double top breakout on the point and figure and a break of a trend line.
Many leading stocks are showing bearish signal reversals on today's rally which means it may have legs especially aerospace and defense stocks as the Middle Eastern Situation between Iran and Israel intensifies. Any short positions need to be covered and additional buy recommendations will be coming shortly.
The rally was good for gold today and I expect a breakout to new highs shortly. Gold is making an ascending triangle and I expect a breakout to new highs in the short term. $122.50 would be the next breakout with a measured move expected to $137.5.
4 Responses