Options Wonderland

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SPY

The market has been very bullish since the March lows. I think the bull trend will continue, here's why:

The bull pop in March propelled all major indices above their 50 day moving averages. Since, there has been 3 pull backs, which brought the major indices temporarily below the 50MA line.

1) June pullback....Duration 3-4 weeks. Fell through 50MA
2) October pullback...Duration 2 weeks. Fell through 50MA.
3) January pullback...Duration: 4 red weeks (we can't look back in hindsight yet, could very well be an ongoing pullback). Fell through 50MA.

Personally, I think these 3 pull backs are very healthy. It's been nearly 1 year since the March lows and during these past 12 months we've had 3 pull backs. Out of every 4 months, expect 1 to be red. Very healthy!!!

Looking at the CCI (20) reading at the top of your chart, it appears this most recent/current pull back has had the most negative impact. But we are almost back in the power zone. This upcoming week is vital, I have my fingers crossed that we send the bears back in their caves and into hibernation for the next 3 months!



Here's a weekly chart: