Charting the S&P 500: Bulls Come Back From a Knockout Punch
Here's where he market stands following an 'inside week.'
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Stocks traded in what is called an "inside week," which basically means the highs were lower than the prior week but the lows were higher than than prior week. What does that mean exactly? Most likely the market is setting up for a bigger move to occur, and that usually means in the direction of the previous trend.
An inside week means the market is consolidating gains but not breaking down below that might establish a downtrend pattern. We often see these consolidation moves after a large run-up; traders/investors establish a zone or area where buying and selling happens more frequently in a narrow range.
This latest occurrence is right at the start of earnings season and when seasonality is somewhat bullish. There are some divergences out there with the indicators, but they can be remedied quickly with a few days up in a row.
We'll see if buyers step in after some earnings releases this week.
