Last Friday all three indices closed down which produced a losing week, but failed to take out the 3rd daily cycle low which is needed to confirm the start of the weekly cycle high to low selling phase. This delay of the selling phase could be due to the seasonal and month/quarter ending factors. Typically the market rallies into major holidays.
The S&P 500 cash index took out the previous week’s low at open on Monday and then immediately rallied off the low to form a very bullish intraday trading on Monday. Tuesday’s gap up open produced a buy signal on the daily cycle level. Last Monday the Fed chairman stated that the Fed will be buying individual company bonds, which is just one step
Last week the S&P 500 had more than 7% correction. It took out the previous week’s high and low, but unfortunately it didn’t close below the previous week’s low on the weekly bar. This is an outside reversal weekly bar, but not the best kind of outside reversal bar. It needed to close below the previous week’s low to qualify for a text book outside weekly reversal.
The market has spoken by producing an outstanding week on the 10th bar from the weekly cycle low which took place on March 23rd. The magnitude of the bounce in price and time establishes that the March 23 low is a four-year cycle low. Since the Nasdaq took the lead to make an all time high, which establishes the basis for an
