Eye of the Hurricane
May 12, 2009 by admin · Leave a Comment
Another week, another move higher. I am nearly convinced that the storm has passed now and that sunny days are ahead for a long time. That is what I will say in 2012. We are far from through the storm and I don’t think we have even come to the eye of the hurricane yet.
Last week I pondered the real chance that the US markets would test their 200 day moving averages and it looks like it could happen very quickly. The Dow’s 200 day moving average sits now at 8996 on the daily chart and the S&P’s 200 day MA is at 954.58. It looks like next week will truly be the test of this rallies strength. My thoughts remain that a bear market is not yet half way to completion and the most I am expecting is a slight move above the 200 day moving averages to sucker in the last few optimists. It will be a bear trap. Be very careful.
The Dow rose 4.41%, the S&P rose 5.89% and the Nasdaq floated up 1.15%. In resource rich Canada the TSX jumped 7.80% and the Venture exchange rose 5.90%. The S&P Gold Index flew up 10.38%.
The cracks in this rally’s foundation are growing quicker now. There are many signs the rally is coming to an end in the face of this past, very strong week. One of which is the VIX volatility index futures being higher than today’s quote, which in the recent past has been a precursor to major falls. Read more about stock market danger…
