The recent shift in market character is becoming apparent, as the S&P 500 has not seen its recent rally met with another bout of multi-day violent selling. The broad market has largely been consolidating sideways for roughly the past week, despite a marginal breakout to monthly highs yesterday morning. While benign consolidation in lieu of wild price swings is no 100% guarantee of a further bull run, it does indeed offer a better setup for traders who have shown patience and restraint at various times since April. In essence, the S&P daily chart is essentially levitating even though the pattern over the past few months dictates we roll over for a few days.
The transports are finally having a pretty good day as a whole, with healthcare and biotechs performing well too. Large biotechs like AMGN and GILD are sporting constructive daily charts, firming up in a manner that I would like to see even more charts resemble. Materials and energy are off a bit this morning, but as you can see below on the XLE ETF energy chart, some giveback or consolidation after its recent multi-month breakout would likely be healthy, so long as the selling continues to stay under control.