Did the Stock Market Dodge a Bullet

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This week started off looking like a Fred Sanford market. “This could be the big one! Elizabeth I’m coming to join you!” Accelerated selling continuing after two weeks of a slow grind lower despite decent earnings reports. But then all of a sudden it stopped. And Friday looks really strong for stocks. Is this the end. Like Neo, did the market dodge a bullet? Maybe. The weekly charts give some clues.

spy

The S&P 500 ETF, $SPY, chart above shows a Hammer candle that is sitting on the 50 week moving average. This is a potential reversal candle, but needs to be confirmed higher next week. The momentum indicator, RSI, has held in the bullish zone for now but the other one, the MACD is still pointing for lower prices. Time to look for those stocks you want to own this weekend and see if the SPY continues higher next week.

tlt

Maybe more interesting is the chart for the US Treasury Bond ETF, $TLT.  The blow off top Noted early this week looks very ugly on this timeframe. But this also needs confirmation by a move lower next week. If it does confirm that is another plus for stocks. But until these things happen it seems best to remain cautious.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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