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!
Re: SPY ... Yes, there is always a trumpimg chance that SPY would remain at or above current levels, but it may take more fundamentally exceptional news than the recent doubts on global recovery, IMHO.
As long as doubts on recovery remain, equity markets will suffer globally.
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