6/29/1Remember, the function of a bull market is to suck everyone in at the top, which brings up the obvious question: Are we there yet? We don’t think so. Volatility is picking up and appears to be weighted to the downside. At press time, the S&P 500, S&P Midcap Index, Dow and Russell 2000 were still above their respective 50 day moving averages (DMA), while the Nasdaq composite is a couple ticks below.
However, the burden of proof is still on the shoulders of the bears. The chart patterns of all of the widely followed averages are clearly bullish. For this to change, we would have to see the 50 day lines of the key indices broken along with penetration of support in evidence at the May 17th intraday lows. The benchmark S&P 500 lost 1.8% on that date, which was the biggest hit it had taken since September of last year. A rally started the next day with the S&P 500 posting seven consecutive winning sessions setting new all-time highs in the process. The numbers to watch are
S&P 500 2,356, Dow 20,601, S&P Midcap Index 1,693, Russell 2000 1,355.
With our models in a positive mode, our advice for long-term investors and traders is to maintain current positions.
