Let's take inventory of where the major averages sit. The Industrials have now recovered to the point where I believe it's fair to say that the initial correction from previous highs is complete. We've put in the initial correction lows that will now act as our bearish trigger. For the Industrials, that line in the sand comes in at 16,100. A rise above 17,280 would put us back to new closing highs, and if confirmed by the Transports would give us a reconfirmation of the bull thesis. Those two scenarios are outlined below using the green and red arrows.
Most likely, we'll see the Industrials trade within the range it has now set (the two horizontal lines) for a while before we see a conclusive break one way or the other. Investors still seem shaken by the extent of the recent sell-off and while recent economic data has been positive, they will ... Log in or subscribe to continue reading.