This chart for today's activity in stocks shows a nice rally after nearly two weeks of sideways to slightly downward trading. Very nice rally over the past two hours!
Note also that on the daily chart (below), the stock indexes have been building what appears to be a possible bottom. A confirmed buy signal for me includes the following:
- Prices close above the 8-period Exponential Moving Average. In this chart, prices still haven't closed above the EMA, so we will have to wait until tomorrow's close to determine whether this buy signal will be completed. However, this chart is very close. The EMA changes to green (it hasn't yet) when prices cross above it and remain there until the close of the day.
- The Klinger Volume indicator is higher (green) and above its moving average (yellow)
- Prices move higher the day after the combination of the above two signals
If prices collapse and move lower tomorrow, this signal will be nullified and the stock market bear will continue, or perhaps a consolidation will ensue. Tomorrow will be a key day to determine if this is the bottom.
