After another soft open, the S&P 500 is now back down to its rising 20 day moving average. When observing a chart, defining what “support” is or should be is often a highly subjective endeavor. In the case of the 20 day moving average, we have a reference point that typically acts as firm support, or thereabouts, during uptrending markets. Of course, it is crucial to note how the S&P and other indices have pulled back this week.

As I have been arguing, we have been witnessing a relatively benign and orderly consolidation on the major index charts. Moreover, I continue to see plenty of green on my screen regarding my watchlists and portfolio. In other word, many individual stocks are acting well even as the indices pulled back. When you couple that with cautious, at best, sentiment I am seeing on social media, all that is left for the bulls to do is step up and recapture the short-term initiative.

As I write this, I see we are flipping to green on the indices. Places like the 20 day moving average are not automatic places to buy, but they are certainly spots where you want to really hone in on the action and see if buyers swoop in to pick off stocks that have been building tight bases this week.