Are We Moving Higher?

Following any type of reversal, whether stocks or indexes, I like to see a retest back to the moving averages. The psychology behind this move is that traders who nailed the reversal are taking profits so you'll observe the stock or index fall back to the moving average as it consolidates for the next move. If you're bullish, this sets up a low risk entry right at the moving averages. For the Dow, this was a good set-up back on 3/31. We could get the same set-up again as the RSI, MACD and OBV are all increasing.