Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
After the volatile session yesterday, the S&P 500 has broken back above the channel we have been discussing for a few weeks and now the Russell 2000 and NASDAQ appear to be joining (was not the case yesterday). If not for the focus on the FOMC presser tomorrow you’d have a nice clean breakout starting here. Tomorrow is of course a major wildcard.
On a related note – the 50 day moving average has been quite the support in 2013. In fact no year other than 1995 in the past 30 comes close to what we are seeing this year. Per WSJ
Usually, the 50-day moving average usually acts like a magnet for an index meanders along a short-term trend. But the index has closed below its 50-day MA just once so far this year, or in 0.9% of the trading days. In the past 30 years, the only other year the index closed below its 50-day MA less than 1% was 1995, he said, when it only closed below the 50-day only once, on the first trading of the year. The next closest was 17.9% in 1996, while the average number of closes below it has been 35%.
That, says Mike O’Rourke, chief market strategist at JonesTrading, “does not represent a normal equity market environment.”
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