Since January 2008, my position has been that the market is either in a major correction or the start of a "Bear Market." Therefore, I thought it was about time to revisit that position.
When it comes to the stock market, I am a trend follower, or momentum trader. I adhere to moving averages as a technical tool to determine and identify the trend of the market, i.e., Bull Market and Bear Market. Overtime, the 50-day EMA and 200-day EMA has been very useful in identifying the underlying trend of the market. That is, when the 50-day EMA is above the 200-day EMA, the market trend is up. Conversely, when the 50-day EMA is below the 200-day EMA, the trend is down. (You may want to read some of my previous posts on the subject of moving averages. You may find them very educational and profitable to your financial well-being.)
Referring to the above two charts, I have left off the time in terms of when the two charts were created. Both charts are depicting that the 50-day EMA has turned up, even though it still lies beneath its 200-day EMA. Is this a foreshadowing event of the start of a new "Bull Market?" The market, as depicted by the S&P 500, has rallied over the past month, as indicated by one of the two above charts.
Tomorrow, I will reveal the dates and the results of the above charts.
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