Charting the S&P 500: Bulls Have No Fear as Volatility Recedes
The bulls are undeniably in control of the market trend.
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We all expected to see the Fed cut rates last week and they did by 1/4 point, but the response by the market was not all that expected. No doubt the S&P 500 had rallied into this important event with a strong move up in August followed by very bullish action during the first half of September. After the rate cut there was a bit of violent action up and down, but the chart here does not show it.
The only thing to pay attention to is the higher higher, higher low in the last bar and higher volume from the prior week. That pattern has been reflected in the last two weeks, which is why we consider this action bullish until further notice.
The indicators all support this conclusion, with strength in the MACD (moving average convergence/divergence), stochastics and improvement in money flow.
Can the markets dip here? Most certainly, but the longer we go the more difficult it becomes for investors to climb on board. Remember, the biggest and best trends are the toughest to get onboard with.
At the time of publication, TheStreet Pro Portfolio had no positions in any securities mentioned.
