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Notice the following on the weekly chart:
-- Prices are at levels not seen since the beginning of 2007
-- All the SMAs are moving lower
-- The shorter SMAs are below the longer SMAs
-- Prices are below all the SMAs
BUT
-- The RSI is oversold, and
-- The MACD is oversold
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Notice the following on the daily chart:
-- Prices have been dropping for four and a half months
-- All the SMAs are moving lower
-- The shorter SMAs are below the longer SMAs
-- Prices are below all the SMAs
BUT:
-- The MACD is rising
Bottom line: The rising MACD on the daily chart indicates prices want to move higher. Add to that the oversold RSI and MACD on the weekly chart and the possibility of a bear market rally emerges. But there is tremendous downward momentum in the market right now that may thwart the rally.
