Another Baby Step in the S&P 500

• Posted by Greg Harmon
• on October 21st, 2015

Many will be disappointed by the progress that the S&P 500 has made this week after breaking the broad range from the fall Friday. Since then it has done nothing. Just moved sideways. Well that is one way to look at it.

Another perspective might be that it is holding up well. Like the parent watching their child crawl up steps for the first time, the sentiment is nervous that the pause may result in a fall. But after climbing a few steps the baby will often rest and then start higher again.

The positives for the market remain. The S&P 500 has held over the break out and looks to open over it again today. The momentum indicators are still strong, but no where near overbought. The Bollinger Bands® are giving it room to the upside. Finally the accumulation/distribution line is rising.

The positive movement is there. The set up is there. Now like the child on the steps, it just needs the collective will to move forward. The next step is at 204.40, which just happens to be near the 100 day SMA. Then 206.4, near both the 150 day and 200 day SMA’s. Expect the parents to remain nervous until those steps are cleared.

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