April 16th, 2008
The market opened dramatically higher this morning as investors “cheer earnings news”, according to CNNMoney.com. The S&P 500 Index opened nearly 1.0% higher and as I write is around 1348.00. If it closes at that level, the Index will again be above the 60-day moving average (MTI of 17284) after only 3 days being below.
The odds of the index reverting back isn’t that odd since it’s happened 19 times since 1963 and most within 5 days.
What is unusual is that 18 of the 19 times that move has accompanied by an increase in the S&P 500 index. The current reversal of direction was accompanied by a nearly 1.0% decline.
While a positive development, history still indicates that momentum hasn’t yet developed and it’s still prudent to take a wait-and-see approach to the market.