The markets took a step back, but not by much, as the S&P and Nasdaq are starting to show some signs of consolidation. Last Wednesday, the markets started breaking down pretty hard, but then ended up recovering their losses into the close. Since then, we haven’t seen as much volatility along with some slightly bullish movement.
The S&P and Nasdaq are moving higher from previous support levels set back in early June, looking more like consolidation than a bear rally. The INDU, however, looks to be in a classic bear rally pattern.
We haven’t seen much change in relative strength or weakness over the last few weeks, so the overall market sentiment is still difficult to read. We should expect some more sideways action, unless we get an unexpected catalyst, which could drive the markets in either direction from their current levels. Best to lean a little bearish here, just to be sure, but don’t open up too much to one side or the other just yet.
Have a great night,
The Maverick Trading Team
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