5 Things Traders Need To See To Become Bullish Again

There are so many traders and investors that remain bullish even when the stock market is under distribution.

Here are 5 things I need to see to become bullish again and stop shorting strength and start trading on the long side.

  1. The Powershares QQQ Trust ETF (QQQ) – aka the Nasdaq 100 ETF – needs to close back above the 200 day moving average as a first signal of bull power and the potential for a return to all-time highs.
  2. All stock market indexes need to begin to trade above the 5 day EMA consistently.
  3. The market needs the shorter term moving averages to begin to cross back over the longer term moving averages. For instance, the 21 day EMA crossing above the 50 day SMA etc.
  4. We need to see “up” days on higher volume than “down” days.
  5. The MACD bullish crossover (in the chart below) needs to hold.

If all these signals are met, I will become bullish again. Until then, I believe the bears have control.

powershares qqq trust etf nasdaq 100 stock market chart

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Twitter: @SJosephBurns

Read more from Steve on his blog NewTraderU.

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.