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Friday, May 15, 2020

Pullback over? 5/15

The bulls came out to buy the gap down this morning and closed SPX above yesterday's high.

SPX closed back above the 20 SMA after just two days below and no confirmation of a break of that line.  That setup is usually bullish.

The futures consolidated just below the 50 SMA today.  This could still turn down on Monday, but if the futures are up they should continue higher next week.

The green count just crossed below the red line.  The overbought condition has been worked off.  The first cross after a strong rally often brings out the buyers.

The bull pressure chart shows the last peak came with the short term red line (top panel) above the green line.  The market was out of gas.  The long term chart in the bottom panel needs to get the green line above the blue line to give a sign the bull market is back on.  It still has not cleared the red line.  Usually bear market rallies last long enough to get that cross.  Of course we are in an unprecedented situation so history is not as useful as usual.  

Unless there is bad news over the weekend it looks like the market wants to try up again.  The 200 DMA could act as a magnet since we got fairly close before this pullback.  If the market turns back down the 50 DMA should catch it and it might only retest the recent low.

Have a great weekend.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.