I seem to continue to under estimate the bounce capability of the markets after the March 2009 stock market lows. The bounce off the big 2007 to 2009 period tested the upper 62 percent retracement limit and this current bounce off the secondary down-leg is also relatively strong within the expected 38 to 62 percent bounce levels. As of today’s highs the SPY has bounced 50 percent and the QQQQ has bounced 60 percent. Such is the strength of the “Getting Back to Even” movement.
Other analysis point to the fact that the gold / dollar relationship does not point to the recent stock market lows as having been a significant turning point. The dollar today tested the April 13, 2010 upside breakout. The gold part of the equation however, negates a stock market upturn for now.
As to China, which was the news today, the FXI China ETF broke out above the 250 day moving average that I cited recently. I am not impressed, however, with its capability to hold above that level for more than a few days, and still believe that China has misread the whole bounce off the 2007 to 2009 economic collapse as it is anticipating much more growth than I believe will transpire.