By Matthew Kerkhoff
On Friday we looked at price action in the Industrials and Transports. Today let’s begin with a look at large-cap vs. small-cap, then we’ll review how Q2 earnings have been stacking up.
The S&P 500 has remained inside a trading range between 2040 and 2130 since early February. While a breakout above or below this range will be a decisive factor in the next move, there are some subtle signs that point to an upward bias.
After reaching a new high in May, the large-cap average fell to an initial correction low in early June. The subsequent rally failed to overcome the prior high, and then the S&P fell below its prior correction low. This action set a bearish tone for the overall market, but since then we have seen some improvement.
From the July lows, the S&P rallied sharply, overcoming its earlier high. This interrupted the pattern of lower lows and lower highs, ... Log in or subscribe to continue reading.