With that said, a stock breaking above its 200-day moving average should be viewed as a bullish thing.

Take a look at the chart below of Apple (NASDAQ:AAPL).

As you can see, Apple first plummeted under its 200-day moving average back in September. And it went on to drop nearly 50% within three months.

But just recently, in mid-April, Apple popped back above its 200-day moving average. That was almost ten bucks ago.

The lesson should be clear, buying into a stock that’s crossing its 200-day moving average it typically a good idea (pending a little research on your part).

Some stocks recently crossing their 200-day moving averages are BHP Billiton (NYSE:BHP), Advanced Micro Devices (NYSE:AMD), Micron (NYSE:MU), Toyota Motors (NYSE:TM), and Sony (NYSE:SNE).

Admittedly, this isn’t exactly shocking stuff. Wal-Mart has been praised for being one of the only retailers to continue posting earnings that surpass estimates. But praise hasn’t given them higher share prices since the crash in October.

As you can see, Wal-Mart’s been dropping since last October. But interestingly enough, WMT has managed to hold above its October lows.

This combined with the fact that both the RSI and Slow Stochastic are showing WMT as oversold means that buyers should rush in and push WMT share prices higher.

For the traders out there – go long and place a stop @ $47 per share. If all goes as planned, WMT should rise over 10% in the next 30 days.

That’s why I love the CBOE Volatility Index ($VIX). The VIX is a measure of various S&P 500 index options.

So when the VIX moves up, it means more people are making bearish bets, and usually the stock market drops.

Right now, the VIX is not only moving down, but confirming a downtrend.

As you can see from the chart above, 40 has been a very important support point over the past year for the VIX.

It hit 40 once at the beginning of the year, once before February and once again in the middle of March. Each time, the VIX would move higher and the stock market would push lower.

But three weeks ago that all changed. The VIX managed to break under 40 by a significant margin. Then, over the past two weeks it went back to 40 and tested its new found support.

The VIX failed support and headed back down.

This means that the stock market should have more fuel, as far as investor optimism is concerned, to push higher still.

Think of it this way – if the foundation of your house was faulty… or if the wood beams holding your home up were weakened… it’s only a matter of time before your house finally crumbles.

The economy and the stock market are the same way.

Right now, the only thing that has changed is evidence that the economy isn’t shrinking as fast. I reckon that means the economy is still shrinking.

Now let me admit that before I jumped to that conclusion, I had to double check my logic.

So I consulted with my five year old niece, Amanda. I asked her “Amanda, if something is shrinking fast and then starts shrinking slower, does that mean it’s still shrinking?”

And she said “yeah you big dummy!”

So if the economy hasn’t even bottomed yet, odds are the stock market will continue moving down. Luckily, right now you’re presented with a golden opportunity.

This is a weekly chart of the Dow Jones Industrial Average. What I want to draw your attention to are those three blue boxes.

What they show is that when the Slow Stochastic and OBV are both above 80, we see stock prices move down over the next 7-12 weeks.

The first time this happened was from October 2007 to November 2007. The Dow dropped 8.5% in 7 weeks. The second time was in April of 2008 to July of 2008. The Dow dropped 15.7% in 11 weeks.

Right now, both the Slow Stochastic and OBV are above 80. The probability of stocks dropping between 8.5% – 15.7% is pretty high.

My prediction is that we’ll see the Dow Jones drop to 6,500 and retest the March lows. That’s a 17% drop.

If the Dow ends the week in the positive, all bets are off.

Source - http://www.onlineinvestingai.com

The chart above is of the economic investment cycle. The blue is the stock market and the yellow is the economy.

This chart shows us what we should already know, that the stock market is forward looking and typically bottoms or peaks out 6 months to a year after the economy.

More importantly, this chart also shows us that bull markets are formed on the back of a healthy financial and transportation sector.

In other words, to see if this is a sucker’s rally or not, we have to see the financial sector bottom out and move higher.

This makes sense. Money is the lifeblood of the economy. If banks aren’t lending it, then the economy can’t expand.

Today, the big question is whether banks are seeing a sustainable turnaround. Wells Fargo announced a $3.3 billion profit and Goldman Sachs made over $1 billion.

But the problem with banks isn’t their ability to make profits in a low interest-rate environment. The problem is the valuation of the mortgage-related assets these banks have on their balance sheet. Banks are basing their leverage on the value of these assets.

If these asset values decline, then banks must write those assets down and raise more funds or deleverage to meet capital requirements.

In other words, earnings or not, banks still have more to do in order to be considered “healthy”. That means this current rally should be one for the “suckers”

A number of technically bullish things have happened over the past 30 days that has turned me into a fully fledged oil bull.

First of all, oil has been making higher highs and higher lows since bottoming in late December.

Second, oil has rallied above its 50 day moving average and since then that average has acted as support.

Third, just a few weeks ago the 20 day moving average crossed above the 50 day moving average. This is known as a bullish cross.

Lastly, the fact that both the RSI and Slow Stochastic have turned up after hitting 50 suggests the underlying trend is strengthening.

Listen if you’re buying for the long-term, this is a sweet spot to buy it at. If you’re a short-term technical trader, this is still a sweet spot to enter into.

If oil keeps rallying then I don’t expect any headwinds untill the $70 mark. By that time, the 200 day moving average should also be around there (marking a huge resistance point)

As you can see from the chart above, the US Dollar Index ($USD) has formed a nice upwards trend line that stretches back to mid-September.

Today, the dollar is hitting that support line. Also, its RSI and Slow Stochastic are both indicating that the stock is oversold and ready for a bounce higher.

Fundamentally, China won’t start dumping dollars unless they want to slam the value of its over $750 billion in treasuries it holds. China also realizes that if it begins dumping dollars, it could trigger a trade war with the US.

Both of those things are bad for China. Yet, that’s not the only reason to suspect that the dollar will remain a reserve currency for some time.

In the G20 meeting coming up on April 1, China plans to make a big deal out of creating a new reserve currency. But, if the US doesn’t want that to happen, it won’t. That’s because for the G20 to adopt a new reserve currency, it would need approval from the US (since it has veto power).

Last time I checked, the US wants to keep its reserve status. And so more than likely, the G20 meeting will be a nonevent (As far as the dollar is concerned).

The play to make is to go long the dollar and ride it back up to its previous highs. But keep a stop-loss around 82.

(If you’re unsure what the VIX is, check out this explanation here.)

As you can see in the chart above, the VIX formed a support line at around 40.

This is a very important line because it hasn’t been breached since late September – just after the Lehman fiasco.

Considering the VIX index measures fear, a break under it would symbolize a less fearful and volatile market. And less volatility correlates perfectly with higher stock prices.

So if you want to be extra safe before buying stocks, wait for the VIX to break under 40 before jumping in.

Back on the 18th of this month I told you that Apple Inc (NASDAQ:AAPL) was trading in a price range of $83 to $100 a share. It was a pattern that had been ongoing since last November.

I said…

Here’s my big, bold prediction: AAPL is heading south. Short AAPL (or buy a put option if you’re feeling saucy) and ride the sucker down to $83 a share.

That’s a nearly 20% profit.

Always remember to play it safe by having a stop-loss before jumping into the play.

Check out this chart to see if this pattern played out…

As you can see, Apple soared past $100 and is now sitting at $108 a share. The call was wrong which is why it’s so important to place a stop-loss with every trade you make.

What’s the correct stop-loss to use? When pattern trading I usually look for a 5 to 1 reward/risk relationship.

So in the Apple example, if I expected gains of 20% then I’d place a stop-loss of 4% to keep myself safe.

Remember, losses will ALWAYS happen; it doesn’t matter if you are Joe the Plumber or Warren Buffet. But what separates the good from the great is the ability to get out of a losing position quickly and get into a winning one.

As interest rates go down, bond prices rise. So all you need is an instrument that rises alongside bond prices to make money.

That instrument is iShares Barclays 20+ Year Treas.Bd ETF (NYSE:TLT)

As you can see from the chart above, after yesterday’s Fed announcement the TLT roared higher. And after making a move that massive – which is quite unprecedented in the bond market – today it consolidated some of those gains.

But don’t let today fool you.

Ben is crazy. And he’s going to do whatever it takes to push long-term interest rates down.

He’s already proven that by announcing a $300 billion Treasury buy-back that will happen over the next six months.

As a result of Bens “crack headed” antics, we should see the TLT reach and even surpass the December peaks of around 122.

If you buy the ETF, that’s a potential 17% move. If you buy the right short-term option, triple-digit gains are definitely within reach.