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.
3 Responses to Trying to Levitate
Well said, Chess… The Transports and Russell 2k have had an amazingly tight correlation. If they both get going, both could be challenging ALL time highs…
Keep that chazerai off my stream!