The markets have been moving sideways for the last couple of months, though recently the S & P 500 set new highs. The markets hit 1655 in late May followed by a fairly good sell off in June, however, favorable news on the Fed’s quantitative easing program pushed the markets to new highs. This has not been a very convincing rally, one might suggest that market insiders have been sellers.
The recent action in the S & P 500 showed a break of the support line at 1655 and this is a sign of weakness. The markets sold off a bit so there is a possibility that the S & P 500 will rally back above the support line and perhaps move to a new high, but the markets appear to be getting tired.
A rally back into the trend channel would require a lot of energy…….energy that appears to be lacking.