The market is clearly in a downward sloping trend. Notice the following:
-- There is a clear lower high/lower low pattern that started in late September/early October last year.
-- Prices are below the 200 day SMA
-- The 200 and 50 day SMA (the long-term averages) are heading lower
-- The 50 day SMA is below th2 200 day SMA
BUT
Stocks have been rallying since mid-July. Notice the following:
-- The 10 and 20 day SMAs are moving higher
-- The 10 day SMA has crossed over the 50 day SMA
-- The 20 day SMA is about to move through the 50 day SMA
In other words, all of the short-term indicators are heading higher. But for this to be a legitimate rally that gets us out of a bear market, we'll need to see prices move through the 200 day SMA and through the downward sloping resistant line started in September of last year.
