Today the sp500 and all other market indices completely evaded the potential bearish weekly gravestone candlestick that was in force as of yesterday. The weekly trend continues to be confirmed higher and should remains so for the rest of September and possibly much of October as well.
Today was a very clear signal that this market is in absolutely no mood to be going down severely again any time soon. We saw a very strong upwards reaction off of new support of the 1120+ range on the sp500 after a breakout several days earlier.
This is a strong tape and today’s action confirms that the path of least resistance is in the northward direction for now.
The market has now set up a bullish triple P pattern on the MACD histogram which would be confirmed with a close above today’s price high.
Even the BKX banking index which I was so concerned about yesterday has now put itself in a position whereby it can trade higher back to the very top of its swing trading range. It has broken back inside its trading range recently and the recent 3 day decline put it at risk of breaking back under the trading range. But today instead it bounced right back inside.
I am re instating the BOT long signal as a continuation long signal as of Monday’s AM opening in the sp500. The fact that the market rejected any ideas of potential downside so strongly is a signal within itself not to go short here. The tape is saying it wants to move higher.
The action over the last 4 days is classic Wyckoff retest action. This is exactly what one wants to see after a break of resistance, a retest of support and then a strong reaction higher off of support. Totally classic.
Ideally the banking stocks would be leading strongly higher but instead they are lagging. At first appearance this does not appear to be a healthy development at all. But the tape action on the Sp500 is saying this market wants to go higher and the banking indices are likely to lag the market for a while.
How long that can go on is unknown but for now the trend is your friend so to speak. . .