Market Summary

The chart below is a 6 month daily chart of the S&P 500 with an indicator I developed called MovingAverageStopBC which is set with the SMA 20 as the stop point which changes the background color of the chart. While we are in an uptrend according to the light green background color of the chart the market has been going sideways for the last several days. This type of chart pattern is called a high base formation which is a bullish chart pattern. However, the last several high base chart patterns have failed to produce breakouts. Click on chart to enlarge.

Forign markets can give us an indication of the global economy of which we are a part and the Chinese market has been leading to the upside in the current rally. The Chinese market has been in a correction since the beginning of August and closed on Friday on the 50 day moving average. If that market goes below the 50 day moving average that could be a bad sign for our market. We are heading into the seasonally weak time of the market in September so a correction in our market is a possibility. We will just have to wait and see.