Market Outlook – 05/08/18 – David Settle
Today, the S&P 500® closed lower by less than one point on very low trading volume. The intermediate line continues to move higher. The near-term line stayed in the upper-reversal zone, which supports the recent bullish trend change. The momentum line fell into oversold territory – but not to extreme lows. The combination of a strengthening bullish posture with an oversold momentum line is a bullish intermediate confirmation signal. This pattern suggests stocks could bounce back up again as soon as tomorrow, especially with the near-term line only spending a couple of days in the upper-reversal zone so far. The NASDAQ Composite and Russell 2000® show more bullish patterns on their charts because they have broken above the most recent near-term high and their downward-sloping resistance trendlines where the large-cap indexes have not yet.
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