The Outlook For The Stock Market Just Got Better
Well, that was fun. It was a wild week, but it is undoubtedly ending on a positive, with a what was a considerable rally into the end of the day. The stock market had a classic tug of war battle, and the bulls have prevailed. The S&P 500 touched 2,535 in the cash market, but the S&P futures retested the lows from the Tuesday morning, and it was pretty much higher the rest of the day. Overall, it was a rise from peak to trough of roughly 100 points, or nearly 4 percent!
But it also worth noting that the S&P failed right at resistance at 2,633. So again, are we out of the woods? No, not yet. But is the picture improving going into the weekend, and for Monday? Yes.
The next chart of the Technology ETF (XLK) shows just how overbought the sector was and how far it has fallen. The chart shows us a trading channel that has been in place since the February lows of 2016, but then in October the ETF broke above the top of the channel, and continued to rise.
But look at it a bit closer and you can see that the ETF touched support around $61, and filled the gap created from months ago.
Apple found a bounce at $150.
Alphabet as well at nearly $1,000
The Biotech ETF (IBB) also found a bounce at support at $101.
Well, it sure feels good to end a crappy week on a better note, and there are plenty of new signs that a bottom has been put in place. But it doesn’t mean the volatility or a retest isn’t in the near future.
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