Charting the S&P 500: Now for the Follow Through
The S&P 500 put in an impressive reversal, but bulls certainly have some work to do.
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A week ago we struggled to believe the markets would rally back up into the channel after failing to hold in. The weakness over the past several weeks turned the candle to teal and this week we see an amber color. That is a neutral on the GoNoGo composite of indicators. However, the shape of that candle is interesting to say the least. This is a doji candle, and a reversal that could line up a move back into the uptrend channel.
That is the most optimistic case, though, as the bulls certainly have some work to do. That bottom end of the channel is now stiff resistance following two consecutive bars below it. Still, if we can turn a higher high, higher low this week then there is the possibility of more upside. No question the market remains on the defensive as buyers are hard to find, but Friday's rally had a good "feel" to it.
The indicators remain bearish and would require more bullish action to show us a turn. It was a down week for the S&P 500 but finishing strong on good turnover may be the positive change the bulls were waiting for.
