The market rallied after several gloomy days last week, the NYSE up:down volume ratio was quite strong. Although the total trading volume seems a bit weak, the uptrend is more likely resumed. On the SPX short term trend daily chart and the following SPX hourly chart, today’s rally has validated the ascending trend line and channel if there is no sell off in the coming days. Regarding the intermediate term trend, we can see on the chart that negative divergence on RSI/STO/volume/ChiOsc/MACD has not been corrected yet, the market movement is still confined in a giant rising wedge, however there is no doubt that the primary trend is up. Over the short term, the market looks bullish and there is few signs of overbought. If the uptrend continues tomorrow, the pullback will be confirmed to be over.
VIX dropped 2.85%. This is quite positive. We have yet to see a new low in VIX as the market goes higher. On the other hand, CPC (put/call ratio) is relatively high, which may indicate people are not extremely optimistic to the near term market.
The crude oil is bouncing back a little bit but it’s unclear whether the consolidation is over before decisively standing above $68. US dollar is not going down while the financials rallied dramatically. To me this seems a little illogical, let’s see if US dollar goes south in the coming days since the trend reversal on XLF is very clear.
Summary: the intermediate term uptrend will likely continue for a while. Over the short term the market is still bullish.
