The lack of follow-though by the bulls after yesterday’s intraday reversal has caused continued consternation amongst traders chomping at the bit to aggressively ride a new trend higher. In reality, the market is not trending at all here. It has been over a week since the S&P 500 printed a multi-month low of 1258, and after that all we have seen are bulls and bears alternating days in which they are in control. Forcing trades is still problematic for many traders in this type of market. So, the exuding patience until the picture clears up is probably the way to go.
That said, taking a look at the daily chart of the Nasdaq Composite should show the progress that the bulls made this week, underneath the surface. On Monday, the bulls held a near-test of last week’s lows. Looking at the candlestick pattern, we see that after Monday we have two large green candles, illustrating potent days of buying, compared to two small-bodied red candles, which show minor indecision more than anything else.
Thus, despite not going off to the races yet, the bulls have a solid opportunity to finally sustain a move higher next week.
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Hmm, I don’t know Chess. I think we’re going back into the mattresses and the PPT is going to test that floor. Greece is going to be big news next week and the politics aren’t looking good.
We shall see. Last week’s lows still good.