For nearly the last 2 months, we have seen some relatively great gains in all the major indices. Was this sign of good things to come or just the calm before the storm? April showers bring May flowers. Will April gains bring May pains?
Dow
Down 6% for the year, but up 2% for the last 3 months. While the index has been going up, it has not been a constant shift higher. This could be a good sign if we conclude that the middle shift (red line) was part of a consolidation period.
The index is sitting right around the major resistance of about 8300; however, for much of the gain during April, the volume was declining, which leads me to wonder how significant the move higher really was.
What we want to look for is if the Dow will break through 8300 or bounce down.
Nasdaq
Up 9% for the year, the Nasdaq has seemed to just trot its way higher and higher. The key point I notice on this chart is that it looks like the index has bounced off the 200 day moving average and with volume larger than normal.
What we want to look for is if the Nasdaq will indeed be heading lower, and how much. There is no real major support until 1600.
S&P 500
Down 3% for the year, but up 4% over the last 3 months. The trend is obviously in the positive direction; however, that can be over with real soon. The S&P is treading right around a significant resistance (orange line) at 875. At the same time during the last mini run higher, volume has declined.
What we want to look for is possibly a bounce down to between 800-825 or see if the index does indeed move higher.