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We closed last Friday at 1344 on the S&P 500, and we currently sit as that level as I write this morning. Since then, we have essentially printed several “doji” candlesticks, denoting mild indecision, and have gone sideways. Despite the lack of any real giveback, or perhaps because of it, there seems to be a growing contingent of bears and underinvested bulls who are trying to crack the market lower. The bulls must now stand up to that scrutiny, not unlike a nervous child going through a TSA body cavity search in a sleazy U.S. airpot. Given the consolidation over the past few days, it can be controversial to try to discern whether the underlying nature of he chip is bearish or bullish.
In this kind of a spot, the prior move is important. Here, we have obviously seen several weeks of bullish price action. Beyond that, as I pointed out yesterday, the transportation stocks have already undergone a stealth correction, as they pull back to their 2o day moving average. The financials have also taken time to reset their charts. In essence, there is a strong argument to be made that we have worked off any frothy conditions under time rather than through aggressive price corrections.
As the session progresses today, I will be inside 12631 looking to see if more charts are resetting for secondary moves higher.
Chess, where can I order a copy of that Cavity
“game?”
children’s aisle in the bookstore (shudder)
You can play it all day long if you go to the airport and wear baggy clothing. It helps a lot if you act really suspicious and loudly proclaim how a search is a violation.
Double shudder