We’ve had quite a rally over the last three weeks. The indices have moved from the bottoms of their summer ranges all the way to the tops of those ranges and beyond. As shown in the charts below, they S&P and Nasdaq are now hovering just above their June highs. I’ll be very impressed if those old highs can turn into support now. If buyers can keep prices above the June highs for a few more days I think we’re in for a serious short squeeze.
The financials aren’t looking quite as good as the broader indices. Like I said a few weeks ago, I find it a lot easier to believe in a move if the financials are participating. The charts of some of the larger XLF components like GS, BAC and WFC don’t instill a lot of confidence in me that this index is ready to push above its summer highs.
The trend table flipped to all “ups” last week
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Up | Up | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
