The market continues to be in sideways consolidation even though it clearly is in the process of a new weekly cycle that started on the week of 04/06/2018. The investors are not convinced that the current level is a bargain despite the great earnings report.
Rising interest rates, strong dollar and trade war concerns are the fundamental reasons that made investors very hesitant to put money back into the market. The hesitation showed up in the price action as sideways consolidation for the last four months.
Last week the S&P 500 cash index marched to pass 2717, which is a prior swing high. It closed firmly above 2717 as well. This action took place on the 5th weekly bar of the weekly cycle which was started on 04/06/2018. So the cycle location is much clearer now.
The S&P 500 cash index violated the wedge on the downside on 05/03/2018, but the next day it promptly reversed the direction. The failure to bust the wedge on the downside brought out the daily cycle that its cycle low was made on 05/03/2018. Right now it is still trading
