A Rally in the Works?

The rally of two weeks ago ran into resistance last week, as was feared, leading to substantial backing off. But it is still within the uptrend that began in early June, defined by the uptrend line I have inserted on the first chart. The line would be encountered around the 1335 level, which is a number the S&P 500 has encountered many times recently.

Volume has been extremely light but concentrated in the declining stocks recently, producing bearish Arms Index entries, and that has pushed the five-day moving average to a somewhat oversold level -- a reversal of what this indicator signaled just a week ago. That suggests another rally soon, and implies the 1335 level is likely to hold in the short term....303 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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