• The Dow Jones industrial average was above the 200 month moving average for nearly 27 years until the monthly close below in March this year.
• That average now stands at 8,642.
• It will be interesting to see whether it could sustain a monthly close above it this month or not and another potential good indicator of what might come next. The 200-month moving average on the S&P is higher at 1,008.
So bottom line
• The magnitude and speed of this bounce has surprised with the break of the S&P levels at 875- 880 opening up the way for extended gains.
• How the markets perform over the month of May could well be a defining factor in whether this rally has more legs.
• A good May would suggest that this move may be longer and more sustainable than we thought and we would have to continue to focus on what topside levels would be achievable.
• However the bottom line is that we remain far from convinced that we are heading back into a fullblown multi-year bull market.
• Rightly or wrong our big picture view just does not have the building blocks that lead us to believe that this is the start of a structural bull market.
Long term DJIA chart
mostly read fxahx
Linear Mode
