Let's start with the macro picture. Notice two important things about this year long chart in daily increments:
-- Prices are below the 200 day SMA and the 200 day SMA has acted as resistance since the end of last year
-- The index has made a series of lower lows and lowers highs which is a classic bear market pattern
On the three month chart, notice the following:
-- Prices dipped below all three SMAs last week, but have since rebounded
-- The 10 and 20 day SMAs are heading higher
-- The 10 and 20 day SMAs have moved through the 50 day SMA
-- The last two points are short-term bullish
-- The 50 and 200 day SMA are heading lower which is long-term bearish
So we have a split market -- a good short-term bullish bias and a long-term bearish bias. That makes the current rally very suspect in its possible longevity.
