Market Summary

Have we made a bottom yet? As I stated before as long as the monthly closing price is below the 12 moving average we are in a bear market. This is the long term (monthly) view. The market fluctuates from extremes of oversold to overbought and back and forth again and again. In a bear market (long term view) when we are oversold we can have intermediate term (weekly) rallies and these are called bear market rallies. They are often violent rallies that retrace the downward trend of the market in a short period of time reclaiming 40, 50, or 60 percent. The volatility of the current market has been a great place for day traders who look at the short term (daily) moves in the market trading off the one hour and five minute charts. This market has not made a V shaped move but has made an L shape so far going sideways for the most part since the October low. Although November made a lower low we have come back off of that low to be about the same place we were at during the October low. There is a chart pattern called a head-and-shoulders formation and it would appear that we have made an inverted head-and-shoulders formation which is bullish. The weekly chart for last week has made a doji candlestick pattern which often appear at tops or bottoms and is a sign of change as neither the bulls nor the bears are dominant. What will the future hold? We will just have to wait and see. Click on table below to enlarge.