Major Index Charts
The action on the major index charts yesterday was significant with the S&P 500 index and the DJIA pulling back to their 200 day moving averages, the NASDAQ Composite dropping below its June high, and the Russell 2000 forming a large bearish engulfing candle below its 50 day moving average. The weekly close is always important and we will check that out over the weekend. As I mentioned yesterday, on the weekly timeframe the S&P is in a horizontal channel consolidation and if support is tested, the assumption is that it will hold and the index will bounce, at some point breaking through channel resistance and resuming the bullish trend. Of course, this is an assumption based on classic technical patterns and past performance, and it requires confirmation, but also the ability to readjust along with the price action and the data.