The market managed to conquer both the 5 and 50-day lines yesterday but needs to add the 21-day line to its belt to complete the recovery and trigger a buy signal. Then, the question will be whether the market can move into a blow-off stage and achieve new highs, or simply move sideways for a bit between the swing low this week and the old all-time high. My best guess is the latter scenario is more likely than the former.
In the Founders Group, we are back to buying the dip on the hourly charts. Our preference is the S&P 500 with a mix of Energy (XLE) and Financials (XLF). I will have more to say over the weekend. As it is Friday, I will not be day trading today, but I would look to yesterday’s half-back at 4411 for a bull/bear threshold.
Staying above 4411 keeps the recovery alive. Moving above yesterday’s high at 4455 is bullish. Moving into the lower half of yesterday’s range would keep the bears at the table for now.
A.F. Thornton