world indices

I mentioned that the bulls have managed to push the major indexes toward the long-term resistance of their respective 200-day moving averages. As you can see from the charts below, the bulls were able to extend their gains for the third week in a row. However, many traders are now curious to see if the momentum will be able to continue as indexes approach the resistance of their long-term moving averages. One chart of interest this week is of the Nasdaq because it was the only major index that closed above its 200-day moving average. We'll watch to see if the other indexes are able to follow suit before predicting the change in the longer-term trend.

I've also added the Relative Strength Index to several of the charts because it is nearing the 70 level. We expect that this indicator will trigger overbought conditions soon (above 70), which could hinder the rally from continuing. We expect that an RSI reading near 70 will make the major indexes prone to a sharp pullback.