Charting the Markets: Bulls Are in for a Pleasant Few Weeks
The bulls got down to business and pushed the envelope with strong a weekly finish.
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After last Monday's horrific session that saw indices losing 1% or more, it was pleasing to the bulls that the week finished on a high note.
Not only that, but the S&P 500 traded and finished above 5,800 for the first time. That was impressive, and leaves the index just 3% shy of the magical 6,000 level. We have been talking about that for awhile, stating that mark should be eclipsed by year's end if not earlier due to strong seasonal trends and the bullish momentum of the prior five months (which have been up each time).
The technical indicators are splendid. The moving average convergence/divergence (MACD) moved up again and confirmed a buy signal. Momentum is very strong according to the stochastics indicator — an amazing move up that leaves it embedded (which means dip buyers will step in to buy on any breaks). The chop indicator is heading down, which means a trend move is building, likely to the upside.
Earnings season has arrived and with it there are some high expectations, but if this last week is any indication, the next few weeks will be quite pleasant.
