Two More Basing Candidates
As the S&P 500 trades below the 1220-to-1225 level (the summer consolidation high) and its 50-day moving average, the erosion in the broader market continues. The longer it remains below this level, the more it diminishes the likelihood, or potency, of a seasonal rally.
As I mentioned in Columnist Conversation on Friday, if the S&P were to close above overhead resistance and in its upper daily range, that could initiate a sharp move higher to the downtrend line drawn off the July, October and December highs in the 1260 area. With the kind of intraday volatility we have seen, it certainly is an option for any final-hour algorithmic trading-inspired heroics. The longer it takes, however, for the index to gain traction, the more likely it will slip back down to the 1190 area. Last week, I highlighted several stocks that are going against the broader market trend and have recently broken above their summer consolidation resistance levels, forming solid bases from which to move higher....375 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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