Wednesday, April 23, 2014

Stock market update

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]