You wouldn't know it from the news or from the action of the stock market today as continued negative economic data has caused a slight sell off in the markets. But the Nasdaq Compositve, the DOW Jones Industrials, the Russell 2000, and the Standard & Poors 500 have all given buy signals in recent days with their 13 day moving averages crossing their 50 day moving averages.

The Nasdaq crossed above 1600 several days ago which triggered the positive bias to the index. I am still looking for a cross above 1760 for a more positive sign that the index is in a rally. But the clear signal across all four indexes provides enough indication to put some money back to work in the better sectors.

Volatility at a 3 month Low

The CBOE Volatility Index (^VIX) has moved to a 3 month low along with the recovery in the markets. This is a very good sign as wild swings in the markets are less likely and stable movements in stocks are to be expected at the current level of 42. The index had moved to as high as 80 with 400 point swings in the Dow on a daily basis as recent as mid-November. These kind of swings will not occur unless the index rises again, which will be a good indicator to move back into cash.