Charting the Markets: This Is What the Bulls Have Been Waiting for
A massive breakout from a wide range indicates buyers are not hesitating.
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What a move these markets made last week, when it appeared just a few days ago that the Federal Reserve inaction was going to pour cold water on a nascent rally.
But clearer heads prevailed and once the smoke cleared after the Fed policy decision (with no change in rates) the dip buyers stepped in and started a massive rally. We can attribute some of those gains to short covering, but let’s face it: bull rallies often start from short covering.
Candles are back on full bullish mode here, blue candles is indicative. But there is a marked changed in the indicators too, with the MACD on a buy signal for the first time since the spring and the money flow pushing higher. Momentum is starting to swing back in the bulls’ favor too, though we probably need another week to confirm that indicator.
Given the sizable move over that last seven sessions (more than 400 S&P points) it would make sense for the markets to retreat a bit. We’ll call the prior highs at 7,620 as good support, a failure there would be bad news. Dip buyers are likely to be active.
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At the time of publication, Lang had no position in any security mentioned.
