The first quarter of 2011 ended on a positive note today with the NASDAQ posting higher volume than yesterday and continued its approach of 2800. Also I failed to mention yesterday that the Russell 2000 (small caps) had claimed higher highs. Chart below. Hopefully we will see the NASDAQ and S&P 500 follow suit in the coming weeks.
My favorite headline of the day – Dow has best start to the year since 1999. While I could care less about the Dow (arguably it has not been a relevant index to track for quite some time), it is interesting to see the overall sentiment looking so cheery.
Positive outlooks aside, on a short term basis we are overbought (see chart below). Furthermore, tomorrow is the start of a new quarter which means it could be an interesting session. If bears wants to make a fresh appearance, tomorrow would be the day to stir some drama. I am noting the caution “just in case”.
With some time to work off some oversold readings, we should continue to move higher. The trend has been pointing back up for several weeks now and until it flips I will continue to put cash back to work on the long side. Stay frosty.
| 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.
