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Markets Give Buy Signals

by Steve Patterson on Friday, March 27, 2009 9:58 PM

Markets Give Buy Signals

The big news this week is the major indexes all giving buy signals with break outs to the upside on the S&P 500, the Dow Jones Industrial Average, the Nasdaq and the Russell 2000. I also like the number of stocks breaking to the upside with their 13 day moving averages moving above their 50 day moving averages. For the complete market according to ClearStation.com 185 stocks broke out on Friday with only 21 stocks breaking to the downside.

Markets Give Buy Signals

The big news this week is the major indexes all giving buy signals with break outs to the upside on the S&P 500, the Dow Jones Industrial Average, the Nasdaq and the Russell 2000. I also like the number of stocks breaking to the upside with their 13 day moving averages moving above their 50 day moving averages. For the complete market according to ClearStation.com 185 stocks broke out on Friday with only 21 stocks breaking to the downside.

Individual Stocks

I searched the break outs for individual companies with good earnings growth but that is a little premature at this time as I could not find any compelling equities. I purchased the Ultra S&P 500 (SSO) twice this week, once on Wednesday and then again Friday when the double index ETF was down 2%.

Economic Recovery

The VIX is also encouraging as it has remained low providing stability to the markets. The markets move before the economy and then jobs improve. I think the first stage of a US rebound has begun and it’s a good time to start building a position. If there’s a break down in the markets, I will get rid of the SH shares within a couple of days of a hold signal.

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7 comment(s) so far...

Anonymous 3/28/2009

ink the first stage of a US rebound ????????

 
Anonymous 3/29/2009

Don't you think that it is a bit soon to be calling bottoms in the market? I say you could wait another week before declaring anything along those lines. After all, it seems to me that we can't break 8000 on the Dow... and are struggling to make new highs. Invest with caution, we could be due for a major collapse, though you make some great points here.

 
Anonymous 3/30/2009

I think much of the problem with the markets was politically related where no one had confidence in the president at the end of President Bush's 2nd term. But if the markets give a hold signal I'll get out of the long positions and wait for a signal higher or lower. At this time the markets are telling us to buy.

 
Anonymous 3/30/2009

Glad to see that the economic is recovery. Hope this recession won't have a big impact in the future.

 
Anonymous 3/30/2009

Recession has just started at least it will take 2009 to come up with in India and US Economy will take 2010-2011 to come up with. I just hope we overcome with this problem soon.

 
Anonymous 3/30/2009

Nice article, thanks. I hope the recession is over very soon.

 
Anonymous 3/30/2009

Its just a matter of time that total change is reach. One cannot achieve it overnight. And you're right, this might be the start of it. Positive thinking and the right attitude are the keys to end recession.

   
  
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