As of today’s close, DJIA is up 2.9% year-to-date, S&P 500 is up 3.6% and NASDAQ is up 5.3%. Not bad for today being just the seventh trading day of the year. Even more impressive are the gains from since the closing low on December 24th. DJIA and S&P 500 are up over 10% and NASDAQ is up 12.8%. These gains combined with a trend of reduced market volatility suggest the worst of the market’s rout could be over and a return to more typical market behavior during the “Best Months” is underway.
Technically, much damage still remains on the charts of DJIA, S&P 500 and NASDAQ, but some healing has taken place. DJIA, S&P 500 and NASDAQ have all rebounded back above support that we put around the old lows from earlier in the first quarter of 2018. The next hurdle will be climbing back above respective 50-day moving averages (magenta solid lines) and eventually back above 200-day moving averages (red solid line). NASDAQ is closest to its 50-day moving average and has been leading the move higher. If NASDAQ breaks through its 50-day moving average, then S&P 500 and DJIA are likely to follow.
As always, please use protective buy and sell stops when trading futures and options.
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