Technicals | Nov 28 2012
The Dow futures, notes the TechWizard, bottomed out last week and had a nice rally towards the close of the week. On the weekly chart (above), the 20-day and 40-day moving averages are both in an uptrend. The MACD is also bullish, with both the slow (white) and fast (black) lines above the 0-line and the fast line suggesting it will turn up soon.
As one can see on the chart, each time the Dow futures bottomed below the 40-day moving average they rallied to new highs.
With the US and Japan printing money full-bore, the Wiz opines, the US stock market is resetting itself for a Christmas rally. If this is the case, a rally to 14000 in the Dow futures is on the cards, on the Wizard's assessment, as the market is beginning to ignore the fiscal cliff and focus on the 2013 US growth story.
The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au. All views expressed are the TechWizard's, not FNArena's (see our disclaimer).
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