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MARKET WRAP UP 10/25/10
Stocks continued their inconceivable march higher today, as the S&P 500 chopped around after a morning gap up to gain 0.21% to 1185. The 200 period weekly moving average, which I discussed in this earlier post, provided resistance during the morning thrust higher. I expect that reference point to continue to be a key level, given that the 200 period weekly was the scene of the top that we formed back in April of this year.
As far as the internals are concerned, breadth was fairly strong today, with the energy and materials complex leading, while financials continued to underperform. Across the daily charts of the leading indices and sectors, we printed what could be argued as a series of bearish shooting star candles. However, to presume a top remains a perilous task, given how potent the uptrend has been over the past several weeks. In order for those shooting star candles to prove true, the bears need to firmly take control of the initiative over the next few days.
Despite how overdue some may think the markets are for a correction, as I noted on Sunday evening, it is best to err on the side of the prevailing trend until further evidence of a change in market character is upon us.
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