Big Test Coming - Posted by Coolhand

In my last post, I said that the indicators were largely neutral, which included smart money (NAAIM). I also expected more up/down action as a result of the reading.




I guess we're starting out with up action this week as the major averages tacked on big gains. That isn't a surprise given it appeared that at least a short term bottom was probably put in last Wednesday. And if you look at where price closed; the S&P 500 hit a higher high and is very close to testing the 200 dma. Price on the DWCPF hit a very marginal higher high.

The last thing I said yesterday was that while the smart money was neutral, the trend is still up. Today was a tangible reminder of this.



Breadth flipped positive on the rally.

So, the big question right now is can the bulls not only sustain this rally, but do so with possible resistance at the 200 dma? I remain neutral until we see what happens in this regard.