An impressive rally from the bottom but does it mean this bear market is over!!! OR Is this just a bear market rally which will be followed by another significant drop in future? Let's check out charts... BPNYA has crossed EMA(30) suggesting more stocks are bullish compared to bearish in NYSE index, also Volatility ($VIX) has subsided below 20 mark providing an environment for market to rise. Last week we showed this divergence playing out in NYSE daily chart which was suggesting a possible rally for next couple weeks. However, market will have to overcome resistance at 9600 (or MA50) followed by 10,000 (or MA100) and then at 10200 (or MA200). Plenty of overhead resistance ahead of making NEW HIGHs. Weekly chart suggests a possible bounce in sync with daily chart. NYUD is well below EMA(21) suggesting that unless we get higher buying volume any rally will be short lived or will be considered as bear rally. Below McClellan Summation Index is clearly trending down suggesting more stocks are declining compared to advancing in cumulative manner. Overall charts are suggesting that, current bounce will need lot of work to convert from bear rally into new bull rally. For now we believe this is just a bear rally which might continue for next 5-8 weeks and then we shall get another major and possibly final drop which could be considered as panic drop scaring the hell out of everyone. Only time will reveal the final act of this market phase...
What does it mean for our Investments?
Bounce rally underway, however stay cautious... Comments are closed.
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