The 40 week average is now at 11111, just above the daily pivot at 1105. I put that as the center point, 1150 as the ultimate weekly target, and somewhere near 1070 as the ultimate support level. The 10 week line is now well below the 40 week, a bear market signal that has to be respected. MACD and stochastics, however, indicate that momentum is turning to the upside, so we could be in for a significant rally here.
The Nasdaq has broken through it's 40 week line. MACD is slightly waeker here, but we are still in good shape rally-wise with a traget around 2350, which, if it stops there, probably won't be enough to drag the 10 week b ack over the 40 week. If it doesn't, we could be in for a long slow grind down.
The Dow industrials are over the 40 week line as well. This does look quite a bit stronger than the other indexes, but for now I don't see it getting above 11000 any time soon. August is traditionally vacation time on Wall Street, and the market usually futzes around until after Labor Day. So far I see nothing to make this year any different.
We are at a point where the corection we have waited for may be just about over. We really haven't gone as low as I thought we were going to (I had a downside target of 950 n the SPX), but it was deeper than a lot of people expected. We can get a decent rally from here and still not hit a new high. The chart pattern to me is still bearish long term, bullish short term.
I will have the new highs update shortly.