Looking at the S&P 500 on its weekly chart, note that, despite the financial media having made quite the circus around last Thursday’s sell-off, the index over the past five weeks has done remarkably little. In fact, courtesy of Friday’s oversold bounce, the index again held the 1980 area on a weekly closing basis, i.e. above previous resistance. Through this lens, bulls could still buy the dips and sell the rallies.
However, looking at some of the damage done on the sector indices such as the consumer discretionary area, selectivity on the upside continues to increase, thus favoring a “sell the rallies” strategy for the time-being. For the record, I do expect us to see a meaningful rally into year-end, however, it is likely to come from lower levels than what we saw last week.
Ready my full analysis here: https://www.tradingfloor.com/posts/us-stocks-choppy-and-sloppy-sell-the-rallies-1781906
