Good morning,
Markets and the principles of technical analysis are fractal, meaning the patterns and trends that work on daily charts work for weekly or monthly charts or even intraday charts.
And the theme of the last four months (chop, chop, chop) was definitely visible in last week’s price action.
We’ll recap it in more detail in today’s report but going forward, I see two possible scenarios.
In the first, we build on recent stabilization and break out from last week’s 2% trading range. 5715 is the key overhead level to watch there.
However, without more durable breadth thrusts, I’m skeptical about near-term upside. Such a breakout would target the major resistance range near 5800 on the S&P 500 and leave technology stocks battling similar resistance.
The second scenario is more painful but has the potential to leave us with a more durable market bottom.
