The Trend Is Your Friend?

Last week, for the first time in well over a year, all major indices crossed above their 200 day moving average, which, technically, is considered a bullish sign.  I am not a big fan of technical analysis, but many traders are, so it is wise to pay attention to such events.  Of course, with today’s market action we may end up below that average again.

In my previous post, I argued that a period of consolidation and sideways movement may be in the cards, as investors are now searching for evidence of actual recovery as opposed to lower rates of decline.  We may see this evidence in second quarter company earnings that will be coming out in mid-July.  Until then, markets could be stuck in the trading range.