Bulls Broke Out! Feel The Rage!

YES! The Bull breakout that I have been waiting for so long has happened at last with the Dow closing up 228.87 points to 12849.36, breaking the Bear's 12750 resistance level decidedly and on rising volume! This is an unambiguous trashing of the Bears today as they rush to cover their shorts, adding on to the bullishness.

I must be the first to admit that I was wrong as well.

I thought the bull run would go into full swing only after oil take a beating, but no, oil was up today and so was stocks! This surprising turn of events does require a good follow up on Monday as investors continue to observe the effects of above $115 oil. $115 oil, adjusted for inflation, was the price region oil was in during the oil shock of the late 70s. And we all know how that ended.

Short term stochastic for the Dow is still slightly off the overbought region, suggesting more strength to come next week before it pullback a little. This week has been extremely exciting for the Bulls as the Dow made its biggest weekly gain of 4.25% of 2008! This also started the up led coming off the rounded bottom formation that I spoke of last week. In fact, the Dow has also held up strong above its 30days moving average since late March and such patterns occuring after a correction is also what signals a recovery. The next resistance level to conquer is the 13000 level, which is denoted by the weekly 30 period moving average. I think a slight pullback would take place at that level before the market make another breakout. So, is this the start of a full scale bull run? I don't think there will be an explosive rally but a long drawn out recovery has definitely begun.


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