In May of 2003, the Nasdaq Composite started to rally after a brutal bear market that had started 3 years earlier. In August of that year, just 3 months later, the market started to pull back to the 10-week moving average line only to bounce higher in the following weeks and continue its uptrend.
That was exactly 20 years ago this week.
In a similar way in May of 2023, the Nasdaq started to rally after a very difficult bear market that consumed all of 2022. Now, again, just 3 months later the Nasdaq is pulling back to the 10-week line.
Often, people who did not get involved with a new bull trend will wait until the first pullback to get invested. That may be happening now.
A bounce off the 10-week line will tell us if that is true. A bounce will indicate if this 2023 rally will continue or if we will instead continue lower for a few more weeks.
As always, past performance does not guarantee future results.
If you need professional money management and want a fiduciary firm that actively manages your portfolio schedule a free consultation with VMG today!
Charts obtained from MarketSmith
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