SPX Undergoing Sideways Consolidation
Ever since we breached the 23.2% retracement of primary {1} on April 29th, SPY has been range bound between 88 and 93. It has gone up and down nicely in channels, as is evident on the 30 day hourly chart seen below.
At the same time, if you would observe the daily chart (below) for the same period, one will notice how the stochastic is come down from overbought to almost oversold in this time period. So, the overbough conditions are being relieved with sideways movement. This is what sideways consolidation is known as.
We all know and agree that what we are witnessing is a bear market rally. Its just of a different nature.. different from the ones we witnessed all year long in 2008. The depths of March were reminiscent of what happened in 1930’s. When the market bounced back.. there were instances where the move from the bottom was as much as 80% in some cases. So don’t be surprised if after some more sideways consolidation we start going up again. The first leg of this move up was fueled by financials, then the commodities.. IMO big cap is going to move up next. Please don’t forget to share some love.
