while Monday’s bullish reversal candlestick in the S&P 500 index does not guarantee a vertical buying spike, it’s suggesting that recent downtrend has been easing. So it’s possible that the market is in an early stage of establishing an important near-term low, where a new up-leg will be based and launched.
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based upon recent trading action, the market is getting tire and further short-term pullback consolidation is possible. Any corrections however, would tend to be relatively shallow because demand for stocks remains strong. In the longer term, the path with least resistance is up but it’s going to be a lot choppier.
buy-on-dip remains the predominant theme though the lack of participation suggested that there wasn’t much conviction behind the bounce so we remain skeptical about the strength of Monday’s recovery. That’s said, over the next couple of days, we could see more range bounces between the 10500 and 10200 levels on the Dow Jones industrial average.



