October 31, 2022, 2:01 pm EDT
Are Bulls Coming Back?
“Are Bulls Coming Back?” After Dow Jones rallied 15% gains in 12 trading days, this is the question many questions may asked. Especially, Dow Jones was able to climb above all trend lines in terms of 20, 50, and 200 day-moving-average.
We do not think the bull market is back. This is simply a bear market rebound as we saw before in March, April, and August 2022. Please see the featured chart of Dow Jones ETF (DIA) which it tried three times months ago but they all failed. This is the fourth time Dow climbed above the 200 DMA line. So, it is very easy to determine the strength of the market by checking out its location against its long-term trend line, 200 DMA.
If Dow can hold on top of 200 DMA in November, then there is a chance for the bulls to claim victory. However, S&P 500 and Nasdaq indexes also need to cross above their 200 DMA lines.
In our opinion, it is very likely to happen in the next two months of 2022.
Some stocks may continue breaking out for new highs like energy stocks (XOM, CVX, SLB), healthcare (LLY, AMGN, CI), and defense (NOC, LMT), but the overall markets are still weak. Thus, we do not believe bulls are back. But, there are some opportunities in some individual stocks for some investors or traders who know how to operate in this market.