Notice that on the long-term chart price action is now occurring below the long-term trend line. That line could also become top-side resistance if this rally continues to progress.
A.) Overall, prices moved from about the 110 level to 103.6 level -- a drop of about 6%. This is a bit low for a solid correction. Ideally we'd like to see at least 10%. But price fell to a bit below the 50 day EMA which is a standard technical sell-off level. Also note the increase in volume as the sell-off continued.
B.) Prices retreated to just below the 50 day EMA. This is a standard technical level.
C.) Prices have now moved through all the EMAs -- a bullish development.
Let's look at the Transports:
A.) Prices dropped about 10% as
B.) prices fell to the 200 day EMA
C.) Prices have since risen through all the EMAs. However they have done so on decreasing volume -- a bearish development.
Overall, it looks as though the sell-off is over. However, there are two key technical points to remember.
1.) Prices are still below the long-term trend line.
2.) The latest move higher has been on decreasing volume.
