Markets Reversed

Bullish trend could be returning

Yesterday could have been the reversal that the markets were looking for. All the major indices closed strong with large upward moves.

The S&P 500 was up +1.71% and the price crossed over the 20-day and the 50-day moving averages. The 10-day is also curving up and that gives me some confidence that the market has reversed or is trying strongly to reverse.

The S&P 500 is now 2.2% away from it’s all time high. The trend is suggesting that high may be taken out soon.

Interestingly, the S&P 500 is doing better than the NASDAQ over the last 1 month.

However, the small cap Russell 2000 is doing better than the S&P 500.

A few days back I had noticed this leadership by the Russell 2000 and it seems like after being choppy and flat for a long time (6 months) the small cap is finally making a move.

I like TNA which is the 3x leveraged small cap instrument mimicking 3x of Russell 2000. I will nibble into it today.

I will also be doing an assessment of the individual market sectors over the weekend to identify instruments that are likely to rise in the near term.