After the first week of 2012, Top Equity News sees the January effect in full effect. Last week, the NASDAQ (2.65%) led the way with all the main indexes up more than 1%.
Not only did the index add points, it tallied at least three technical buy signals. The NASDAQ surpassed its 200 day-moving-average for the first time in six months. In another first, the index cut through its upper trend-line, burying a rally stopped that’s been in place since in October 2011. The crossover party is joined by the index’s 12 day-moving-average topping the 50 day mark, while the 26 day is just 3 points behind.
Our market internals look good, too. TEN’s short-term momentum model, while slowing, is pushing the market needle to buy. The intermediate-term indicator we use flipped to a bullish reading last week. Finally, the long-term gauge is drifting a bit too, but it is firmly in the green.
Unless Europe’s concerns float back to the top, TEN says that as long as the NASDAQ stays above 2600, the current up-trend should remain intact.
Another potential disruption could come from the Persian Gulf. European nations have agreed to join the US in tightening sanctions on Iran. To retaliate, Iran is threatening to close the Strait of Hormuz.
This high/trip wire act has little margin for error. Much of the analysis TEN read over the weekend suggests a possible return to $140 oil if the situation escalates much further. If shots are fired, the doomsday scenarios ice any thoughts of recovery with $200 oil forecasts.
Last week, we wrote about a few Oil& Gas ETFs along with a few hot stocks found within their portfolios. You might want to re-read it and put a few dollars in one of the stocks or ETFs for just in case insurance.
Make sure you stick with Top Equity every day as we will try to capitalize on events as they unfold.
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