As we head into the final day of a broadly solid week of gains, the view of the markets through our Trend Analyzer Tool has drastically improved from just a couple weeks ago. Headed into November, every major US Index ETF was extremely oversold. Now a little over a week into the month, with consistent momentum to the upside, every ETF has made fairly large movements out of oversold territory into neutral as can be seen by the long tails on most names. The Dow (DIA) has improved the most, currently trading above its 50-DMA and up 3.3% over the past five days. The year-to-date performance has also recovered across the board since October when several names had gone negative.
Despite this, investors should still exercise a degree of caution. While the short-term outlook has without a doubt improved, the long-term trends remain on the mend. Only four of the major Index ETFs are now in uptrends on a six-month time frame. It will take some more time of consistent constructive upwards movement such as a series of higher lows until we should expect these trends to start switching direction, but only time will tell.