An Expected Rally

At the end of last week, after the steep and sudden decline, it looked as though we were due for some rallying. The Arms Index was getting oversold on a short-term basis. Moreover, the drop had taken the averages to just about where support had appeared repeatedly ever since the market started to stall in March. So the strength in the S&P 500 is no surprise.   

However, the drop last week was enough to break the ascending trendline and suggest that the move since November has been halted. Consequently, I look for a little more strength in here, but I do not anticipate new highs. It looks more likely that we are in the process of making the right shoulder of an emerging head-and-shoulders formation with the lows around 1540 and the highs around 1575....223 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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