The newspaper headlines are so negative that it takes all my strength to read them. So what do they say about the trend of the market? Let's review a few technical items. New lows on Friday were triple the rate of new highs. The advance-decline line was rolling over. There are six distribution days on the NASDAQ and three distribution days on the S&P Composite. The percentage of stocks trading above their 200-day moving averages was at 43, well below the 50% level. Investor's Business Daily's index of 25 growth mutual funds shows a declining trend in this index.
So all in all, the technical background for the stock market does not look good. Nevertheless, the D-J Averages appear constructive.
Below, we see the Dow testing its 50-day moving average and well above its (red) 200-day MA. But note that MACD is rolling over.
The Transports are also testing their 50-day MA and MACD has rolled over.
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