As
we talked about in the previous report, the stock market won’t be completely
out of the woods until we see most of the six major indices back above their
30-day and 60-day moving averages.
As
of this writing, only the Dow Industrials and the NYSE Composite (NYA) have
managed this feat (below). The NASDAQ
100 (NDX), the S&P 400 Midcap (MID) and the Russell 2000 Smallcap (RUT) are
all currently below both moving averages.
I would point out that the damage reflected in these three indices since
March is far more indicative of the true state of the stock market this
spring.
While
the large-cap weighted Dow and SPX are near their all-time highs, most stocks
have taken a pounding in recent weeks.
It therefore hasn’t been a good time to own stocks, contrary to what the
mainstream media has said. This is why
it’s important to follow closely a technical discipline instead of the
fundamentally-based pronouncements of the Wall Street PR machine.
[Excerpted
from the April 16 issue of Momentum Strategies Report]
