The stock market rally off the March crash lows has defied all thought gravity.
The economy is still slow to reopen and concerns about coronavirus remain high.
But as often is the case, the stock market takes the path most uncommon (and that causes the most pain).
So here we are, nearing all-time highs on the Nasdaq 100 and almost back to 3000 on the S&P 500 Index. Today’s chart, however, warns that the rally may be nearing a pause / pullback as the S&P 500 is showing signs of a broadening formation.
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S&P 500 Index “daily” Chart
The stock market recovery rally (bear market rally) has seen the S&P 500 recover just over 61.8 percent of its decline.
The past 2-3 weeks has seen the index form a broadening pattern with the highs just under the 200 day moving average. This looks bearish (and heavy). Though 1-2 percent upside may be in the cards near-term, risks are rising.
Twitter: @andrewnyquist
The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
