Major indices moving sideways, but uptrend still dominates
Today’s message will be brief, because I am preparing to spend the next couple of days at a show for senior citizens in Salt Lake City.
The past couple of weeks we’ve watched as major indices pulled back from the highs reached earlier in the month. This is a fairly typical pattern after the market has experienced a period of solid gains. Based solely on how the market is reacting, the current situation seems to be more typical of a sideways consolidation rather than a sharp downward correction.
The black line on the chart below shows the daily price activity of the Nasdaq. I’ve marked the current market formation in red, along with several prior similar patterns. Recent serious corrections have been much steeper and faster, with a lot of the damage occurring in just a few days.
Since bottoming in mid-August, stocks have had a strong run and were ready and overdue for at least a brief pause. But so far, there is nothing to indicate that the long-term uptrend is in jeopardy.
F.S.
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