Pivotal Turn in the Markets

The following commentary from ChartAdvisor presents an accurate snapshot of this week’s stock market outlook. (I couldn’t have said it better myself, so I won’t) 

The stock market took a plunge this past week after the Fed minutes revealed renewed concern over economic growth. The markets had been stalling near important resistance levels, and Wednesday’s gap lower left a lot of damage in its wake. This week’s reversal could prove to be a pivotal turn in the markets, as there is potential that a much larger top will form on the weekly charts. The rally that began in March has retraced about two-thirds of the decline that occurred through the financial crisis. With the markets stalling in this area, some are thinking another bear market could be unfolding. While this theory should not be dismissed, it is still much too early to assume anything more than a pullback is occurring. The case can be made for multiple scenarios and traders are probably better served standing aside until the picture becomes clearer.

Have a great week,
Michael

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